Council weighs pros, cons of making rail tax permanent - Hawaii News Now - KGMB and KHNL

Council weighs pros, cons of making rail tax permanent

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HONOLULU (HawaiiNewsNow) -

The Honolulu City Council says there's strong support among its members to build Honolulu's rail system all the way to Ala Moana.

But paying for it -- by making the rail tax surcharge permanent -- is another matter.

Some City Council members worry about having to go back to the state Legislature for the second time in two years to extend the rail tax surcharge to pay for cost overruns. They feel burned by previous low-ball estimates from the rail authority's former leadership.

"Last year, it was really difficult and sort of embarrassing because when we went to the Legislature, the true picture was not given to the (lawmakers) regarding the finances," said City Council Budget Chairwoman Ann Kobayashi.

On Wednesday, the City Council heard a resolution to increase the rail tax surcharge in perpetuity. The permanent tax would help complete the 20-mile project, whose costs have ballooned to about $8.6 billion.

City Council Transportation Chairman Joey Manahan said a permanent rail tax could also cover the rail's annual operating and maintenance costs, estimated at more than $100 million a year

"I support the general excise tax in perpetuity because it's the broadest resolution of all the resolutions," he said.

The budget committee deferred action on the resolution until December. That's when the rail authority is expected to come up with an undated financial plan.

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