(BIVN) – After a long debate on the floor of the State House, representatives voted to pass Senate Bill 4 to fund Honolulu’s $8.2 billion rail project. The final tally was 31 yes, 15 no and five excused.
The bill will provide about $2.39 billion to complete construction of the rail project to Ala Moana and provide a secure funding source to ensure continued federal support, legislators say.
The bill included a controversial plan to raise the hotel room tax charged to visitors on all islands by one percent from 9.25 percent to 10.25 percent for 13 years, from January 1, 2018 to December 31, 2030. This Transient Accommodation Tax also applies to timeshares. This will provide $1.25 billion of the $2.39 billion to finish the project.
The use of the TAT, collected on all islands, to fund a Honolulu project did not sit well with the other counties, and state legislators felt the pressure to vote no. All Big Island senators voted no on the bill, and Hawaii Island representatives were divided.
In the end, Big Island Representatives Richard Creagan, Cindy Evans, Nicole Lowen, and Chris Todd voted no.
The other Big Island reps, Mark Nakashima, Richard Onishi, and Joy San Buenaventura voted ‘aye’, with Onishi and San Buenaventura voting so with reservations.
The bill also permanently increases the counties’ share of the TAT from its current $93 million base to $103 million. In addition, SB 4 extends the general excise tax surcharge on Oahu for three additional years, from December 31, 2027 through December 31, 2030, providing $1.25 billion of the rail cost, while reducing the State Department of Taxation’s administrative fee on the GET surcharge from 10 percent to one percent. The bill also requires a state run forensic audit of the rail project and annual financial reviews.
The Senate passed the measure on Wednesday. The bill now goes to Governor David Ige, who says he fully anticipates signing the bill “before the Honolulu City Council meets on Tuesday.”
“I thank everyone who took the time to testify this week, including the leaders from the counties. The special session has not been easy, but the Legislature did not give up,” the governor said in a statement after the vote. “I especially thank the Legislature for passing this compromise measure, which allows us to complete the rail line to Ala Moana. The entire state will benefit from this strategic investment.”
House Speaker Scott K. Saiki said it is now up to the City to manage the project “in a way that is both accountable to the taxpayers and completed within its budget.”
“The legislature has taken on the responsibility of finding a way to fund rail and to secure federal funding,” Saiki said. “I want to thank our lawmakers for working together to reach this compromise.”