The following letter has been sent to all State Legislators and Honolulu Councilmembers:
February 2, 2015
To: All State Senators and Representatives
Re: End the State Skim on Rail Funds
Dear Senators and Representatives,
The Honolulu rail transit project has been and continues to be the most controversial infrastructure program in recent Hawaii history. One of us (Okino), was the principal advocate for rail when the City Council originally authorized the project. While the other (Djou), lead the opposition to rail on the council. Both of us, however, respect that the voters spoke in favor of the system at the ballot box and both of us are troubled at how the rail system is now being handled.
Now, before the first train has carried the first passenger, the $5.5 bil. project is already projected to run upwards of$900 mil. over-budget. While we can continue to debate the merits of rail, the reality is that this project is here and being built. Our community needs to find a way to make the rail system work responsibly and with financial prudence.
Multiple proposals are being pushing to make the .5% general excise tax increase permanent to cover the near billion dollar short fall in the rail system. But this is a betrayal of what the proponents of the rail system promised - that the largest tax increase in Hawaii history would be "temporary."
Rather than immediately move toward implementing another round of tax increases and forcing Hawaii residents to continue paying beyond what was promised, there is an easier solution that doesn't require more taxes - stop the state 10% skim off of rail funds.
In an act of Machiavellian politics, the rail tax increase was passed by allowing the State to skim the first 10% of the City's rail funds for the State. The City government takes all of the risk and does all of the work on rail, but the state government carved for itself a 10% skim off the top of all local tax funds generated for rail for no reason but simple greed. The Legislature did so because it could, and this is wrong; we ask that you correct this wrong.
A major dent in closing the near billion dollar deficit in the rail project could be accomplished by merely returning the unjustified State taking of the City's rail tax funding. (Keep in mind the State's skim only takes tax money from Oahu residents and redistributes it across Hawaii, including the neighbor islands, for projects totally unrelated to transportation.) Any remaining deficit balance in rail funding then can be made up, as promised, by Hawaii's congressional delegation.
What we are asking for is simple common sense and basic fairness. The Legislature should return the unjustified skim before moving forward on any extension of the general excise tax increase.
Local residents deserve an accountable and responsible government, especially with the spending of billions of dollars on rail. That's why the time has come for the State to end its skim off of rail funds. We ask that you join us in helping find a way of saving the rail system, restoring responsible accountability to our government, without placing more taxes on our people.
Charles Djou, Honolulu City Councilmember, District IV (2003-2010)
Gary Okino, Honolulu City Councilmember, District VIII (2000-2011)
cc: Councilmembers, Honolulu City Council
PDF: Original Letter