With all 25 state senators casting votes, legislation aimed at rescuing the city’s cash-strapped rail project by raising state taxes passed out of the full Senate today with a 16-9 vote and now heads over to the House of Representatives.
Senate Bill 4 would raise the hotel room tax statewide by 1 percentage point to 10.25 percent for the next 13 years to generate $1.32 billion for rail. The measure also would extend the half-percent general excise tax surcharge on Oahu for another three years — through 2030 — to raise $1.04 billion.
Some of the senators who opposed the bill said they do not support raising statewide taxes for a county-level project; do not support providing more money for a project they view as financially mismanaged; and do not support levying higher taxes on the visitor industry to subsidize rail.
Sen. Josh Green, who voted against the bill, told colleagues ahead of the vote that the Legislature has not been able to justify any GET increase to pay for critical state needs because the half-percent excise surcharge — which took effect in 2007 — is already dedicated to rail.
“We should ask ourselves: is funding one project more important than fixing our (public) hospitals, repairing our schools, hiring more teachers, providing affordable health care?” Green said.
Sen. Gil Riviere said while he is not opposed to rail, he could not support the funding measure to give more money to the project.
Riviere said he is not “anti-rail,” but “what I’m opposed to is this Brobdingnagian, budget-busting boondoggle that has become a black hole sucking” resources away from other priorities.
Sen. Wil Espero spoke in support of the bill, saying although he’s heard from constituents who are unhappy and frustrated with the rail project’s escalating costs, “unfortunately there is no turning back.”
“We’re not going to tear down what’s been built,” Espero said. “We need to complete this.”
The partially built rail project is significantly over budget, with estimated costs swelling from $5.26 billion in late 2014 to nearly $10 billion, including financing costs. The Federal Transit Administration has given the city a Sept. 15 deadline to show how it plans to raise the money to cover the budget gap. The FTA has already extended that deadline several times in the past 13 months.
The Senate votes were as follows:
- Stanley Chang (D-Diamond Head-Kahala-Hawaii Kai)
- Donovan Dela Cruz (D-Wahiawa-Whitmore-Mililani Mauka)
- Will Espero (D-Ewa Beach-Iroquois Point)
- Mike Gabbard (D-Kapolei-Makakilo)
- Brickwood Galuteria (D-Kakaako-McCully-Waikiki)
- Les Ihara (D-Moiliili-Kaimuki-Palolo)
- Gil Keith-Agaran (D-Waihee-Wailuku-Kahului)
- Michelle Kidani (D-Mililani-Waikele-Kunia)
- Donna Mercado Kim (D-Kalihi Valley-Moanalua-Halawa)
- Clarence Nishihara (D-Waipahu-Pearl City)
- Karl Rhoads (D-Downtown-Nuuanu-Liliha)
- Maile Shimabukuro (D-Kalaeloa-Waianae-Makaha)
- Jill Tokuda (D-Kailua-Kaneohe)
- Glenn Wakai (D-Kalihi-Salt Lake-Aliamanu)
- Ron Kouchi (D-Kauai-Niihau)
- Brian Taniguchi (D-Makiki-Tantalus-Manoa)
- Roz Baker (D-West Maui-South Maui)
- J. Kalani English (D-Molokai-Lanai-East Maui)
- Josh Green (D-Naalehu-Kailua-Kona)
- Breene Harimoto (D-Pearl Harbor-Pearl City-Aiea)
- Lorraine Inouye (D-Kaupulehu-Waimea-North Hilo)
- Kaiali‘i Kahele (D-Hilo)
- Gil Riviere (D-Heeia-Laie-Waialua)
- Russell Ruderman (D-Puna)
- Laura Thielen (D-Hawaii Kai-Waimanalo-Kailua)