Senate committee makes several changes to rail tax bill

Updated: Feb. 9, 2017 at 9:31 PM HST
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HONOLULU (HawaiiNewsNow) - A measure that would extend the half percentage point general excise tax surcharge for the city's rail project is still alive, but with several changes and additions.

The state Senate Transportation Committee is proposing extending the tax, but not forever. It also wants to give some money back to low-income families.

The original version of Senate Bill 1183 would have made the rail tax permanent. It has been bringing in about $250 million a year and is only used for construction costs. An amendment to the bill would extend it only five years past the current 2027 expiration date.

Also, the state currently takes a ten percent cut of the rail tax revenue as an administrative fee.

The measure would eliminate the ten percent cut, but doesn't set a specific dollar amount.

There are concerns that it will take longer to pay for the rail project if the state takes a bigger cut.

Senate Transportation Chairwoman Lorraine Inouye said the changes to the bill won't affect the rail surcharge.

"The ordinance for the city and county is already in place except for the ability to extend the dates," she said. "So there's nothing that would jeopardize the rail surcharge as far as what's in the measure."

The bill also would allow the neighbor island counties to pass their own half percentage point surcharges to pay for their own transportation needs. Other new additions to the measure include an income tax credit to lower-income families to offset the surcharge, and a proposed Bus Rapid Transit line from Central Oahu to the Pearl Highlands rail transit station.

"Everything is on the table," Inouye said.

Inouye also said the details on the amended bill are still being hammered out and won't be available until Monday. A public hearing on the measure is scheduled Wednesday.

HART estimates the total cost for construction is $8.2 billion.

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