Legislators want answers to $1.3B question for more rail funding

For politicians, the best way to trigger a bout of no action is to ask for a straight up-or-down vote on a tax increase.

There is no better way to clear a table, or rid a room of state lawmakers, than to schedule a vote on raising taxes. And if the tax increase is to pay for the massively overbudget, semi-popular Honolulu rail project, it just guarantees a festival of inaction.

So it is not surprising that when this spring, the City Council and Mayor Kirk Caldwell came begging for more than a billion dollars extra for a rail system that only half the voters want, the response was “We’ll get back to you.”

So now we have just about arrived at the getting back to you part and things still are less than clear.

Last week Senate President Ron Kouchi and House Speaker Scott Saiki announced that sometime in July or August they will call the Legislature back into session to do something about getting the city money. All this is made necessary because the federal government is still waiting for someone in Hawaii to explain how the Honolulu rail project, including more than a billion in federal money, is going to handle the cost overruns.

“There is a sense that the FTA (Federal Transit Administration) was beginning to monitor what is happening here and the congressional delegation needed to be able to respond to the FTA with something,” Saiki said in an interview last week.

The choice is either to allow a surcharge on the general excise tax to continue — the Senate proposes for another 10 years — or to raise the state hotel room tax to 12 percent to raise $1.3 billion.

The House’s leaders figure 10 years of increased hotel taxes and just two additional years of the GET surcharge should take care of the city.

Former House Speaker Joe Souki, who was ousted by Saiki, said he doubts the Saiki plan is as solid as the Senate’s bill.

“At this point, the Senate holds the upper hand. It has the leverage,” Souki said in an interview last week.

Souki figures that if negotiations don’t go well, the pressure will be on Saiki and his Finance chairwoman, Rep. Sylvia Luke. Both have been “cool to rail,” Souki said, and if the bill fails, it will be seen as their fault.

“If it fails, there is going to be some repercussions. The unions even now are looking for candidates,” said Souki, a strong rail supporter.

Saiki, however, doubts that the House has much support for extending the GET and that leaves just the hotels as the only other place to go to raise a billion dollars.

“The House vote was pretty strong throughout the regular session; my sense is the House would not go for a long-term GET increase, even a 10-year extension,” Saiki said, adding that the other option would be to raise the GET.

“Basically, do we tax residents and Hawaii business, or do we tax tourists?” Saiki said.

That is the sort of logic that Saiki and Luke will have to examine this summer during the special session.

The political alternative of just walking away from the project is really not under discussion, both Souki and Saiki said — meaning that somehow, the reluctant and the unwilling have to come into the room, sit at the table and decide who will pay for Honolulu’s train. The basic question — do we tax residents and Hawaii business, or do we tax tourists? — remains unanswered.