Hawaii State Capitol 2

Legislature Votes on Rail Tax Extension & Increase

Saving rail is more important than saving the taxpayers.

This is the conclusion that I have come to at the close of this week’s “special session” in which legislators chose to extend the General Excise Tax surcharge to fund rail by another 3 years to 2030 and levy an increase to the Transient Accommodations Tax (TAT) charged statewide on all hotel and travel accommodations. The result of the tax increase and extension will be far reaching into peoples’ pocketbooks for years and decades to come.

As I have stated again and again in this blog and other sites previous, RAIL is a gigantic, expensive mistake that should have never happened. Billed as a transportation solution for residents on the west side of Oahu, rail is anything but that. It has turned into a gigantic, fiscal black hole complete with numerous change orders and cost overruns. The once touted $3.5 billion price tag has climbed to at least $10 billion and will probably climb even higher to $12 to $15 billion.

Kaka'ako High Rise Construction
Rail has become a gigantic, expensive development project that will impact taxpayers for decades to come.

Rail has turned out to be a development project for the well connected and financed investment companies that have taken advantage of the Transit Oriented Development (TOD) breaks given by the city to construct high priced glass and concrete condo towers, shopping malls and more. These developments are springing up over prime agriculture lands out in West Oahu (Ho’opili project), replacing low rent and affordable residential and commercial districts in the Pearl City, Salt Lake, Airport, Kalihi, Kaka’ako and Ala Moana areas. Longtime residents who live along the TOD corridors will be negatively impacted with higher property assessments that will lead to higher property taxes.

As a long time resident living near one of the TOD zones at the Ala Moana Center end of the rail line, I have seen a steady increase of my property taxes over the years. With at least a half dozen new glass towers proposed, already under construction or completed in my area, I can only look forward to a dramatic property tax increase that may price me out of my own home. Sad huh? This does not include a possible, dedicated property tax increase to pay for the remainder of rail itself as threatened by Honolulu Mayor Kirk Caldwell.

I hate the rail for these reasons and many more. I wish it were never built.

— Melvin Ah Ching, Editor & Publisher, Hawaii Political Platter

Legislative History of SB4 | Special Session 2017

Special Session
SB4  
Measure Title: RELATING TO GOVERNMENT.
Report Title: County Surcharge on State Tax; Extension; Transient Accommodations Tax; Appropriations
Description: Authorizes a county that has adopted a surcharge on state tax to extend the surcharge to 12/31/2030. Authorizes a county to adopt a surcharge on state tax before 3/31/2018, under certain conditions. Decreases from 10% to 1% the surcharge gross proceeds retained by the State. Allows the director of finance to pay revenues derived from the county surcharge under certain conditions. Clarifies uses of surcharge revenues. Establishes a mass transit… (See bill for full description.)
Companion:
Package:
Current Referral: TRN/FIN
Introducer(s): KOUCHI (Introduced by request of another party)
Sort by Date Status Text
8/25/2017 S Pending Introduction.
8/25/2017 S The committee on WAM has scheduled a public hearing on 08-28-17 3:00pm in the Capitol Auditorium.
8/28/2017 S Introduced.
8/28/2017 S Passed First Reading.
8/28/2017 S Referred to WAM.
8/28/2017 H Bill scheduled to be heard by TRN/FIN on Wednesday, 08-30-17 1:30PM in the Auditorium.
8/28/2017 S The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. The votes in WAM were as follows: 6 Aye(s); Senator(s) Dela Cruz, Keith-Agaran, Galuteria, Kidani, Shimabukuro, Wakai; Aye(s) with reservations: none; 5 No(es): English, Harimoto, Inouye, Kahele, Riviere; and 0 Excused: none.
8/29/2017 S Reported from WAM (Stand. Com. Rep. No. 3) with recommendation of passage on Second Reading and placement on the calendar for Third Reading.
8/29/2017 S Report adopted; Passed Second Reading with Senators Green, Harimoto, Inouye, Kahele, Riviere, Ruderman and Thielen voting “No”.
8/29/2017 S One Day Notice 08-30-17.
8/30/2017 S Passed Third Reading. Ayes, 16; Aye(s) with reservations: none. Noes, 9 (Senator(s) Baker, English, Green, Harimoto, Inouye, Kahele, Riviere, Ruderman, L. Thielen). Excused, 0 (none). Transmitted to House.
8/30/2017 H Received from Senate (Sen. Com. No. 3).
8/30/2017 H Passed First Reading.
8/30/2017 H Referred to TRN/FIN, referral sheet 1.
8/30/2017 H The committee on TRN recommends that the measure be PASSED, UNAMENDED. The votes were as follows: 3 Ayes: Representative(s) Aquino, Nakamura, McDermott; 1 Aye with reservations: San Buenaventura; 2 Noes: Quinlan, Brower; and 1 Excused: Hashem.
8/30/2017 H The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 8 Ayes: Representative(s) Luke, Cullen, Gates, Holt, Keohokalole, LoPresti, Nakamura, Yamashita; Ayes with reservations: none; 6 Noes: Cachola, DeCoite, Kobayashi, Lowen, Tupola, Ward; and 1 Excused: Representative(s) Fukumoto.
8/31/2017 H Reported from TRN/FIN (Stand. Com. Rep. No. 3), recommending passage on Second Reading and placement on the calendar for Third Reading.
8/31/2017 H Passed Second Reading; placed on the calendar for Third Reading with Representative(s) Creagan, Evans, McKelvey, Onishi, Oshiro, San Buenaventura voting aye with reservations (6); Representative(s) Brower, Choy, Lowen, Quinlan, Thielen, Todd, Tupola, Ward voting no (8) and Representative(s) Har, Hashem, Matsumoto, McDermott, Nishimoto excused (5).
9/1/2017 H Floor amendment #1 failed following Voice vote: Noes, 2 (Representative(s) Luke, McKelvey). Excused, 4 (Representative(s) Har, Hashem, Matsumoto, Nishimoto).
9/1/2017 H Floor amendment #2 failed following Voice vote: Noes, 1 (Representative(s) Luke). Excused, 4 (Representative(s) Har, Hashem, Matsumoto, Nishimoto).
9/1/2017 H Floor amendment #3 failed following Voice vote: Noes, 3 (Representative(s) Luke, Yamane, Say). Excused, 4 (Representative(s) Har, Hashem, Matsumoto, Nishimoto).
9/1/2017 H Floor amendment #4 failed following Voice vote: Noes, 2 (Representative(s) Luke, Aquino). Excused, 4 (Representative(s) Har, Hashem, Matsumoto, Nishimoto).
9/1/2017 H Passed Third Reading with Representative(s) Kobayashi, Onishi, Oshiro, San Buenaventura, Woodson voting aye with reservations; Representative(s) Brower, Cachola, Creagan, DeCoite, Evans, Kong, Lowen, McKelvey, Quinlan, Say, Thielen, Todd, Tokioka, Tupola, Ward voting no (15) and Representative(s) Choy, Har, Hashem, Matsumoto, Nishimoto excused (5). Transmitted to Senate.
9/1/2017 S Received from House (Hse. Com. No. 3).
9/1/2017 S Enrolled to Governor.

It is highly likely that Hawaii Governor David Ige will sign the bill into law.

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Rail Tax Extension and Increase Bill Pass Out Of State Senate

Not surprisingly, 16 of the 25 Senators, all Democrats voted in favor of increasing the Transient Accommodations Tax (TAT) and extending the General Excise Tax (GET) surcharge to pay for the gigantically expensive fixed rail project now under construction on Oahu. The application of a new charge to the TAT will also force neighbor island counties to pay for Oahu rail.

Rescuing the taxpayers from the financial shackles of this gigantic, expensive rail mistake are the farthest thing on most if not all of the legislator and rail supporters minds. All they want to do is build this expensive train and take more money away from the struggling Hawaii taxpayers. It is probably hopeless (short of a North Korean nuclear missile attack) to think that somehow this gigantic expensive train can be stopped.

SB4 which was voted by the full Senate today moves on to the State House of Representatives where it is going through the same hearing process as it did in the Senate. It is expected that despite much testimony in opposition to rail and the new taxes, the House like the Senate will just rubber stamp its approval to the rail tax bailout bill.

It is so sad that the taxpayers have to continue to dish out more money for this gigantic mess that should have never been built in the first place.

Senators Who Voted YES on SB4 to the GET extension and TAT increase to bail out rail.

Stanley Chang (D-Diamond Head-Kahala-Hawaii Kai)
Donovan Dela Cruz (D-Wahiawa-Whitmore-Mililani Mauka)
Will Espero (D-Ewa Beach-Iroquois Point)
Mike Gabbard (D-Kapolei-Makakilo)
Brickwood Galuteria (D-Kakaako-McCully-Waikiki)
Les Ihara (D-Moiliili-Kaimuki-Palolo)
Gil Keith-Agaran (D-Waihee-Wailuku-Kahului)
Michelle Kidani (D-Mililani-Waikele-Kunia)
Donna Mercado Kim (D-Kalihi Valley-Moanalua-Halawa)
Clarence Nishihara (D-Waipahu-Pearl City)
Karl Rhoads (D-Downtown-Nuuanu-Liliha)
Maile Shimabukuro (D-Kalaeloa-Waianae-Makaha)
Jill Tokuda (D-Kailua-Kaneohe)
Glenn Wakai (D-Kalihi-Salt Lake-Aliamanu)
Ron Kouchi (D-Kauai-Niihau)
Brian Taniguchi (D-Makiki-Tantalus-Manoa)

Senators Who Voted NO on SB4:

Roz Baker (D-West Maui-South Maui)
J. Kalani English (D-Molokai-Lanai-East Maui)
Josh Green (D-Naalehu-Kailua-Kona)
Breene Harimoto (D-Pearl Harbor-Pearl City-Aiea)
Lorraine Inouye (D-Kaupulehu-Waimea-North Hilo)
Kaiali‘i Kahele (D-Hilo)
Gil Riviere (D-Heeia-Laie-Waialua)
Russell Ruderman (D-Puna)
Laura Thielen (D-Hawaii Kai-Waimanalo-Kailua)

All of the State Senators in Hawaii are Democrats.

The bill is being heard today in the House Finance Committee. The hearing started at 1:30pm.
Mayor Caldwell begs for fundsHonolulu Mayor Kirk Caldwell and City Council Chair, Ron Menor are shown testifying on SB4 in their effort to get more money to fund rail at this past Monday’s hearing before the State Senate Ways & Means Committee. Photo by Choon James.