Rail funding bill passes second reading in the House

A bill to bail out rail has moved to a final vote expected Friday.

After public testimony Wednesday afternoon, the House Finance and Transportation committees voted in favor of the measure.

It went to the full House Thursday morning for a procedural floor vote and passed a second reading with 32 representatives voting to pass the bill.

Representatives Richard Creagan, Cindy Evans, Angus McKelvey, Richard Onishi, Marcus Oshiro, and Joy San Buenaventura voted yes with reservations.

Eight representatives voted no: Tom Brower, Nicole Lowen, Sean Quinlan, Cynthia Thielen, Chris Todd, Andria Tupola, and Gene Ward.

Representatives Sharon Har, Mark Hashem, Lauren Matsumoto, Bob McDermott, and Scott Nishimoto were excused from the floor.

Senate Bill 4 addresses the City and County of Honolulu’s rail construction shortfall of $2.378 billion, currently the state’s largest public-works project, by proposing the following:

  • Extend the General Excise Tax on Oahu for three additional years through December 31, 2030 which will provide $1.046 billion.
  • Raise the Transient Accommodation Tax (TAT) by one percent to 10.25 percent for 13 years, to December 31, 2030, which will provide $1.326 billion.
  • Permanently increase the counties’ share of the TAT from $93 million to $103 million.
  • Reduce the state Department of Taxation’s administrative fee on the GET surcharge from 10 percent to one percent.
  • Create a Mass Transit Special Fund to review and disburse funds to the city for its costs on the rail project.
  • Require a state run audit of the rail project and annual financial reviews.

Before the procedural vote, lawmakers piped up.

“We can kill this bill. The city has enough money to finish the rail to Middle Street,” said Choy.

“We are at a point where we have the opportunity to decline enablers for the city and the mayor. I don’t want to enable the city to continue with its project that has just gone out of control,” said Thielen.

Tupola wanted House Speaker Scott Saiki to consider extending the special session, which is scheduled to end Friday.

“There are many people opining that they wanted time to understand, to hear, to weigh in — and specifically, it was the outer islanders. That’s where the huge conflict was last night,” said Tupola. “They felt like if there were informational briefings on the other islands, we would have avoided a lot of conflict that happened last night. You yourself said, Mr. Speaker, that this has been a very, very divisive issue and that by dividing us from island against island, outer island versus Oahu island, west side versus east side, it hasn’t helped our state at all.

“I really wanted to say that I feel like the Sept. 15 date that everyone keeps alluding to, we knew that since April. The city knew that since April, that this date was coming around. That date has been here for months, that they knew they had to prepare,” Tupola continued. “In the meantime, our job is to listen and allow everyone to weigh in and allow everyone a chance to understand. There’s been such huge misinformation, and I would say lack of transparency and timing, maybe. I don’t know. There’s a lot of different things that led up to why where at where we’re at today with a lot of the confusion, and I personally feel like we should take the time to have the other islands have hearings.”

Later, Saiki told KHON2 that Tupola’s request wasn’t feasible.

“The Senate and the House deliberated on this bill for at least three months, since regular session ended in May,” he said. “The committees also took the unprecedented step of holding a public hearing on this issue three weeks ago. They allowed any member of the public to participate and present testimony. Based upon the input at that public hearing, which did include testimony from neighbor islands, officials and residents, it was based on that input that the committees drafted this proposal.”

Saiki added, “We had always said we would plan for a five-day special session. We just completed day four and we are expecting to adjourn tomorrow on day five.”

Ward warned the Legislature that he plans to fight the bill on Friday.

“The one thing we don’t want to do is to raise the property taxes to pay for this boondoggle. That would be totally unfair, totally unjust, and uncalled for, and if this is a sleeper play that the mayor or his council is doing, we should out him,” Ward said. “That’s why we should discuss and amend this bill with thoroughness tomorrow, and I hope you don’t have it as a done deal and it’s not something we can open up and make better. We can always do better.”

The House convenes at 10 a.m. for a final vote.

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