HB134 passed the House and Senate Tuesday May 5, 2015 and is headed to Governor Ige's desk. The bill provides for a five year extension of the GE Tax override to pay for the Honolulu rail project. If Ige signs HB134 into law, the 0.5% GE Tax hike will be extended from its current 2022 sunset to 2027.
HB134: Text, Status
Reauthorizes the counties' authority to establish a county surcharge on state tax for a limited time period, with the surcharge to be effective until 12/31/2027, if adopted. Requires counties to adopt an ordinance to establish or extend a surcharge prior to 7/1/2016. Limits the use of surcharge revenues by counties that have already established a county surcharge on state tax to capital costs. Expands the definition of capital costs for counties with a population greater than 500,000. Amends the definition of "public lands" to include the air rights over any portion of state land upon which a county mass transit project is developed after 7/11/2005. (HB134 CD1)
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5/5/2015 Senate -- Passed Final Reading, as amended (CD 1).
21 Ayes; (including with reservations)
3 Ayes with reservations: Senators Gabbard, Ihara, Shimabukuro.
4 Noes: Senators Riviere, Slom, L. Thielen, Wakai.
0 Excused: none.
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5/5/2015 House -- Passed Final Reading as amended in CD 1
39 Ayes; (including with reservations)
1 Aye with reservations: Representative Cullen;
12 Noes: Representatives Brower, Johanson, Kobayashi, Kong, C. Lee, Lowen, Nishimoto, Ohno, San Buenaventura, Thielen, Tupola, Ward
none excused (0).
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Ige: Rail Tax Hike would 'Condone Mismanagement'
April 6, 2015: Hawaii Gov. David Ige isn’t saying whether he will approve or veto any extension of a General Excise Tax surcharge that is being earmarked for Honolulu’s $6 billion rail project.
But he does acknowledge that he’s worried an estimated $910 million shortfall in construction costs will continue to balloon. And he’s not sure taxpayers should be penalized for potential mismanagement.
At an editorial board meeting with Civil Beat editors and reporters last week, Ige noted that until very recently rail project officials had assured the public that the project was on time and within budget. But a few months ago, Honolulu Authority for Rapid Transportation officials said the project was coming up significantly short of money.
“There’s a big difference between on budget and on schedule and a $1 billion shortfall,” Ige said. “That’s a concern. An extension would essentially embrace the notion that if in fact the project was mismanaged from a financial perspective, that we are authorizing or condoning that activity.” ...
Like lawmakers, Ige wants to see the city take more ownership of the project and its finances. At the very least, he said it should be a point of debate since the project is funded with state and federal money.
“They’re seeking an extension to the tax so that we can pay cash for the project,” Ige said. “(But) the City Council has talked about floating bonds as short-term financing. Should we have a conversation that the city can be floating bonds to fund a portion of the construction costs rather than paying all cash for the project?”
read ... Condoning Mismanagement