Two days before the legislative session is set to end, a solution to fund Honolulu’s rail project is still up in the air.
There’s a clear division now between the House and the Senate on how to fully fund the project so it reaches Ala Moana Center.
The Senate wants to extend the general excise tax for another 10 years. The House now wants to raise the visitor-based Transient Accommodations Tax (TAT) one percent, a change from the 2.75 percent proposed on Friday.
So how did we get here and what happens next?
The House says using the TAT ensures there will be enough money for rail, and will mean less pain for taxpayers statewide.
Senators say it will hurt the economy so there will be plenty of pain, and extending the GET makes more sense.
There was plenty of argument on both sides in the House and Senate chambers as they tried to hammer out which option works best. Most state senators say using the hotel room tax is not a legitimate option because there was never a public hearing on the issue.
“We did not have input from the people. We did not have input from experts. We did not have input from analysts, so we don’t know what the impact would be for the state,” said Sen. Josh Green, who represents Hawaii Island. “It’s just unconscionable and unacceptable. I therefore support this draft. We have dealt with GET for rail for many years.”
While a majority of House representatives say it’s best to have visitors pay for a good chunk of the project.
“We keep hearing this from the city. Well, guess what? Now we’ve got a proposal that has just that happening. The tourists can pay for it, and frankly, I think it’s obvious that the tourist economy can support a one-percent increase,” said Rep. Matt LoPresti, who represents Ewa and Ocean Pointe
In the end, the Senate voted 16-9 to extend the GET with the city getting 90 percent of it and the state 10 percent. Meanwhile, the House voted to raise the TAT for 11 years.
“This is the biggest money-generating bill that we’ve had in discussions. It would generate over $1.7 billion for rail, exclusively and only for rail,” Rep. Henry Aquino, who chairs the House transportation committee.
“The economic ramification of using the Transient Accommodation Tax, which was never meant to be used this way, could be devastating, and I believe would be devastating for our Hawaii economy that’s already fragile,” said Sen. Kai Kahele of Hilo.
Neither the House nor the Senate seems willing to budge from their positions, and with the session expected to end on Thursday, we are likely headed to a special session.
“The Speaker and the Senate president need to get together and pow wow. It’s probably going to be a late night for them tonight. They have to see if they can work this out,” said House Majority Leader Rep. Scott Saiki.
The Federal Transit Administration says it is evaluating the recovery plan sent in by HART, and will determine the next steps after completing the review.