Senator Kai Kahele’s Response to Questions on Special Session on Honolulu Rapid Transit System

Senator Kai Kahele

Aloha Damon and mahalo for your email. Although we (the Senate) have not seen a bill yet there has been speculation to what a bill may look like to help fund the Honolulu Rail Project shortfall, however I can provide a response to your questions based on the knowledge I have so far.

Question #1: Answer: NO. I do not support increasing the TAT Statewide to fund the rail project. Front loading the rail project with money from a TAT statewide increase is bad policy for the State. Leisure tourism is our number one industry and is what drives GE revenues. Raising the TAT hotel tax statewide has the potential to hurt our tourism industry. In addition, I have heard from many of my constituents in Hilo and they are opposed to raising the TAT hotel tax statewide which would make on island and off island travel for hard working Hawaiʻi Island families, youth sports teams and church groups that much more expensive when they need to stay in our island hotels. If it makes Hawaiʻi Island hotels more expensive for local families, to fund the rail project on Oahu, I cannot support that.

Questions #2: Answer: YES. I do support the extension of the GE surcharge on Oahu to fund the rail project. The GE surcharge on Oahu has been paid and collected by Oahu residents since 2007 and is set to expire in 2027. An extension of this broad based tax, which the voters of Oahu voted for seems reasonable to me. It will also not impact the neighbor islands or the tourism industry. I do support a 6 year extension of the surcharge to complete the rail project.

Questions #3: Answer: YES. If front loading the rail project to decrease total cost and interest paid was what the voters and residents of Oahu wanted than I would support that. The Hawaiʻi GE tax is inherently a regressive tax and has the potential to affect lower income individuals and families which we would need to weigh appropriately. However, if this proposal could decrease the amount of years for the GE extension, which also helps lower income families, and ends up costing less in total interest paid, the legislature should consider it. Again, I would like to see what the residents of Oahu think about this proposal, maybe an informal poll could be taken.


Mahalo for representing the Big Island in legislative issues. I have some questions for you folks and hope you will respond to me by Wednesday, August 23rd, 2017

Questions:
1. Will you vote YES or NO on a 1% STATEWIDE increase to the Transient Accommodations Tax (9.25% to 10.25%) to help fund the Honolulu Rapid Transit System in the upcoming legislative special session?
If your answer is YES, please explain why? If your answer is NO, please explain why?
2. Would you support a 6 year extension of the Honolulu General Excise Tax Surcharge of 0.5% from 2027 to 2034 if this will help fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO
3. Would you support an increase of the Honolulu General Excise Tax Surcharge of 0.5% to 0.62% and a 3 year extension of the Honolulu General Excise Tax Surcharge from 2028 to 2030 if this will fully fund the Honolulu Rapid Transit System without raising the Transient Accommodations Tax STATEWIDE?
YES or NO

Thank you for your participation in this quick and important decision that will affect all of us on this island.

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