Senate lawmakers have advanced a bill to extend the tax surcharge funding Oahu’s cash-strapped rail transit project for an additional 25 years.
The original language of Senate Bill 19, introduced by Senate Transportation Chairman Clarence Nishihara, aimed to lift the 2022 sunset and make the 0.5 percent surcharge on Oahu’s general excise tax permanent, reflecting what Mayor Kirk Caldwell and other rail leaders have suggested.
On Thursday, members of the Senate Transportation and Public Safety, Intergovernmental and Military Affairs committees added the 25-year time limit as a means to complete the original 20-mile stretch to Ala Moana Center, plus extensions to the University of Hawaii-Manoa campus and downtown Kapolei.
That provision came after Honolulu Authority for Rapid Transportation Executive Director Dan Grabauskas testified to members that according to 2011 estimates it could cost an additional $4 billion total to complete the two extensions and could require 18 or 19 more years of GET surcharge collection.
The project currently faces as much as a $910 million shortfall to get to Ala Moana Center.
The committees also added provisions requiring the state auditor to review HART’s financial books before the 2016 legislative session. In addition, the bill now diverts half of the state’s 10 percent administrative collection fee on that surcharge to fund what’s known as "transit-oriented development" efforts. Currently, all of the state’s take goes to its general fund.
The bill next goes before the Senate Ways and Means Committee.
In written testimony, the state budget director advised that state lawmakers shouldn’t consider an extension until they get a detailed accounting of rail expenditures, plus updated cost projections for construction and operations.
"Most of that information we already have," said Grabauskas.
Earlier in the day, Gov. David Ige said he’s "committed to the rail project" but still hasn’t heard "a real good response" for why the tax needs to be extended this session. Rail officials project that they’ll be short by early 2016 of the funds they’ll need to issue future contracts. Grabauskas further testified Thursday that sharply rising construction prices in Honolulu could add to the cost if building stalls.
