Tuesday, May 21, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, June 25, 2017
Anatomy of Epic Fail on Rail
By Tom Yamachika @ 5:01 AM :: 5253 Views :: Rail, Taxes

Anatomy of Epic Fail on Rail

by Tom Yamachika, President, Tax Foundation Hawaii

In early May, on the day our Legislature adjourned, one of the newspapers summarized our Legislature’s work on the Honolulu transit surcharge extension as “Epic Fail on Rail.” With the Federal Highway Administration poised to pull out its $1.5 billion commitment if no funding solution is firmed up, our legislators need to get their collective act together if they want to help the project get back on track.

How did we get to be in this spot? This week, we’ll retrace Senate Bill 1183 and its tortuous history through our legislative labyrinth.

SB 1183, like its companion House Bill 1442, was a 6-page bill to extend permanently the current rail surcharge on general excise tax (GET). The bill also proposed to give an unspecified percentage of the surcharge proceeds to the state DOT (Department of Transportation). The other counties were given the option to adopt their own GET surcharge beginning in 2018.

The first committees to work on the bill, the Senate Committees on Transportation and Energy and Public Safety, Intergovernmental, and Military Affairs, came up with a 78-page monster containing two parts, one that would extend the surcharge permanently and another that would extend it to the year 2032. (Yes, these conflict with each other.) Other sections of the bill would establish a tax credit for low-income taxpayers; raise the base GET rate to 4.5% for everyone (the surcharge would be on top of that); and contained a pages-long laundry list of mandates to the City. At the time, the Senate Transportation Chair explained that she wanted to keep all options open.

The Senate Ways & Means Committee took a very different tack. Its 10-page version basically said, “We’ll take away the State’s 10% skim off the surcharge, but no extension; you’re on your own.” That draft unanimously passed the full Senate and went over to the House.

There, the House Transportation Committee kept the bill alive by putting blanks in it – its draft extended the tax to an unspecified date, reinstated the skim but replaced the percentage with a blank percent to recover the State’s costs and a blank percent that would go the DOT for State highway projects.

The House Finance Committee then filled in the blanks, extending the tax for two years, and dropping the skim to 1%, none of which would be earmarked for the DOT.

This version went to the Conference Committee, and then surprising things started happening. First, the Senate proposed a new draft, radically different from the version that passed the Senate, which extended the surcharge for ten years and raised the skim to 20%. The House came back with a draft that left the GET surcharge untouched, dropped the skim to 1%, and raised the hotel room tax from 9.25% to a hefty 12%. The latter proposal, though innovative, caught the hotel industry unaware, prompting vigorous objections. Then-Senate money chair Tokuda agreed to that version with tweaks a few hours later, thereby making the Final Decking deadline.

After frantic meetings through the weekend, the money chairs, apparently with some members of the hotel industry, reached a compromise involving a shorter GET extension and a lower TAT hike. Amendments were introduced on the chamber floors to implement the “agreement,” although another version with only a GET extension and no TAT increase, which Mayor Caldwell supported, was circulating in the Senate. The House passed one version and jettisoned its Speaker, while the Senate adopted the other version and deposed Chair Tokuda. With no agreement between the chambers, neither version can be enacted. That is where we are now.

We now seem to have a bunch of rudderless ships in the harbor banging into each other. Could the Governor have brought both sides together? Was Senate President Kouchi capable of herding the 25 senators? And how about former Speaker Souki, new Speaker Saiki, or House money chair Luke? To what or whom should we be looking for leadership to get us out of this mess?

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii