State and City Close to Transit Tax Compromise - Hawaii News Now - KGMB and KHNL

State and City Close to Transit Tax Compromise

Doris Deguzan knows her grocery bill may be about to go up, but she doesn't mind. Doris Deguzan knows her grocery bill may be about to go up, but she doesn't mind.

by Darren Pai

(KHNL) - Makakilo resident Doris Deguzan knows her grocery bill may be about to go up, but she doesn't mind.

"I know but we need to do something here in hawaii, it's so bad. Traffic is so bad," Deguzan said.

To raise money for a transit system, general excise taxes will go up from 4 to 4.5 percent, so the more you spend the more you pay.

Mayor Mufi Hannemann said the state will collect the taxes. Hannemann said the state legislature agreed to appropriate $5 million to cover the state's start up costs. If that money doesn't come through, Hannemann said the city will pick up the tab.

Although the mayor has said he favors a rail system running from Kapolei to Downtown Honolulu, the city has not yet decided what kind of mass transit project it will pursue. The city council is expected to make that decision by the end of the year.

"It continues to impede our quality of life and there's no question in my mind that this is our last chance," Hannemann said.

Rail would cost billions of dollars. The tax increase is expected to generate $150 million a year to help cover the cost, but some say its worth it.

"People will be home earlier," Deguzan said. "I think they'll end up being happier with their families and they'll have more time to do different things."

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