Honolulu Rail Project Gets a Boost as Ige Signs GET Extension Bill
The governor聽sets aside his skepticism about extending a surcharge of the General Excise Tax to help pay for a $6 billion project that’s over its budget.
Hawaii Gov. David Ige signed Wednesday to extend Honolulu’s聽rail tax for another five years to help pay for cost overruns.
But Ige also called on the Honolulu Authority for Rapid Transportation 鈥 the city agency overseeing construction of the $6 billion project 鈥 to provide him with annual reports to help track costs and progress.
鈥淭he primary reason I signed this bill is because we made a commitment years ago, and we must keep this commitment to see rail to its completion,鈥 Ige said in a press release. His office has held bill-signing ceremonies for several other measures in recent days.
鈥淚, too, have concerns about cost overruns,” he stated in the release. “The excise tax is an investment by the taxpayers of Hawaii and my job is to ensure that their hard-earned money is being spent efficiently, effectively and productively.”
Gov. David Ige hopes annual reports on rail will help provide better oversight of the $6 billion project, the largest public works undertaking in the state’s history.
Cory Lum/Civil Beat
The governor had聽long been skeptical about the city’s claim聽that the project was in urgent need of new tax money. But he also made clear his desire to see the 20-mile project completed.
Honolulu relies on a 0.5 percent surcharge on the state General Excise Tax to pay for rail. The city also received a $1.5 billion grant from the federal government.
But the project began experiencing troubles last year when construction bids came in much higher than expected and tax collections lagged behind expectations.
There were also numerous delays caused by lawsuits brought by聽Native Hawaiian activists and rail opponents.
Honolulu Mayor Kirk Caldwell teamed with HART officials to convince legislators to聽bail out the project,聽although there are now questions about just how honest they were during the pitch.
Caldwell told lawmakers聽that if he didn’t get a GET extension the city聽would need to raise property taxes 30 percent to 43 percent.
But internal emails first obtained by the Honolulu Star-Advertiser found that covering the聽project’s estimated $910 million shortfall would only require a 5.6 percent increase in local property taxes.
The Honolulu City Council still must approve the extension of the GET surcharge for rail. And while that might seem like an easy聽task, City Council Chairman Ernie Martin has warned that it won’t be a “easy sell.”
Honolulu’s GET surcharge for rail is set to expire in 2022. The extension, if approved, would push the sunset date back to 2027.
The bill also authorizes other counties to extend the GET by the same amount for their own transportation projects.
