Legislators make Caldwell a ‘take-it-or-leave-it’ offer

The ongoing friction between several state lawmakers and Honolulu Mayor Kirk Caldwell is a key subplot in the drama playing out this week in the Legislature as it decides whether, and how, to raise the money to bail out the city’s financially strapped rail project.

Negotiators from the House and Senate have tentatively reached agreement on a deal that involves raising hotel room taxes statewide by 1 percentage point over the next 13 years, through 2030, to raise an additional $1.32 billion for the rail line. The “hybrid” plan also calls for extending the half-percent excise tax surcharge on Oahu for another three years, which would raise an additional $1.04 billion. In addition, the state’s administrative fee on the surcharge will be trimmed to 1 percent from 10 percent.

Both houses will meet in special session next week to consider the plan. If it passes in the Legislature, the City Council would also need to vote on extending the excise tax surcharge.

Caldwell was summoned to Senate President Ron Kouchi’s office Wednesday evening to discuss the proposal.

At the meeting, House Finance Chairwoman Sylvia Luke asked him to accept the terms and conditions of the package, the mayor said.

He took that to mean that there was no room for negotiation, that state lawmakers were offering a “take-it-or-leave-it” proposition, the mayor said.

Caldwell responded that he would need to take the proposal back to be analyzed by financial officers in both the Department of Budget and Fiscal Services and the Honolulu Authority of Rapid Transportation.

Tempers flared, and after some yelling, Caldwell said, he and Gary Kurokawa, his chief of staff, walked out of the room abruptly.

“It ended up with me and (Kurokawa) leaving after, what, an hour and a half?” Caldwell said. “But it ended with one of the members, I think who had maybe drank a little too much, was getting belligerent. And I listened for a while, and then I said, ‘I don’t need to take this.’”

Caldwell declined to identify the lawmaker.

Kouchi, at a press conference Thursday afternoon, downplayed the incident.

“I would just say that it was a passionate discussion and exchange of ideas, and there’s been so much emotion being invested in this,” Kouchi said. “Everybody is passionate in trying to do what they believe is right, and he decided that he needed to take some of the numbers and walk across the street to Honolulu Hale and take a closer look before he could answer some of the questions that were posed to him, and we certainly thought that that was a good idea, to look at the numbers more carefully.”

There’s been an undercurrent of hostility and mistrust in the relationship between Caldwell and several House leaders, in particular Luke and House Speaker Scott Saiki. All three were part of the Democratic majority in the House about a decade ago, but the leadership fractured with Luke and Saiki on one side, Caldwell on the other.

Whenever Caldwell has appeared before legislative committees on the rail issue in recent years, he’s been given an icy reception. That pattern held true as Caldwell spoke at a joint House-Senate hearing earlier this month.

When Caldwell and other city officials initially balked at the idea of raising the hotel room tax to help finance rail, Luke chided them for not understanding that front-loading the situation with cash would help reduce finance costs.

“I don’t know why reasonable, intelligent people can’t figure this out,” Luke said.

Caldwell's letter to lawmakers on rail by Honolulu Star-Advertiser on Scribd

Rail Financing Bill by Honolulu Star-Advertiser on Scribd