Honolulu mayor signs bill to extend tax for rail

A bill to extend Oahu’s general excise tax surcharge for the next three years has been signed into law.

The Honolulu City Council passed Bill 45, CD1 on Wednesday and Mayor Kirk Caldwell gave it his signature Thursday afternoon.

The measure extends Oahu’s half-percent surcharge to the state’s GET by three years until the end of 2030, which officials say will provide an estimated $1.04 billion toward the construction of all 20 miles of rail to Ala Moana.

“I think it’s been difficult for the City and County of Honolulu. I’m sure it’s been difficult for (the Honolulu Authority for Rapid Transportation) too, but I think in life, the things that are most worth fighting for are usually very difficult, and a lot of effort has to be put into anything that’s worthwhile, and this project is very worthwhile,” said Caldwell.

A bill passed by the state Legislature during a special session last week also calls for the following:

  • 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.

“This is my third day on the job, but I did have a chance yesterday to address the entire staff, consultants, and contractors of HART yesterday and I reminded them that the elected officials did the hard work, and now we know that all the eyes are on us and we need to step our game up and deliver this project successfully, and that’s what we intend to do,” said HART’s new executive director and CEO Andy Robbins.

The city has also taken on $350 million in rail bond debt in a sale in that will pay off about $80 million in HART short-term borrowing and provide the rest in cash to pay bills for the train project.

Click here to view the city’s short-term borrowing status as of summer 2017.

Meanwhile, HART is updating its cash-flow projections ahead of next week’s deadline to turn in a revised recovery plan to the Federal Transit Administration.

The FTA has blocked payments of about half of its $1.55 billion grant to the city, pending approval of the plan.

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