Senator Lorraine Inouye’s Response to Questions on Special Session on Honolulu Rapid Transit System

 

Senator Lorraine Inouye

Aloha Damon,

Thank you for your email.

Although there are plans to go into Special Session, we have not gotten official word from the Leadership of both Houses, specifically, the President of the State Senate and the Speaker of the House, about whether we will convene and the dates. The last week in August has been targeted but no word as of today.

Hence, there Is no draft bill to reference, however there is a federal deadline such that your questions are timely and relevant and I am happy to respond to your questions:

Question 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?

My answer is absolutely NO. The rail project is on O’ahu, and the initial financial plan the Legislature approved 10 years ago was to allow the City and County of Honolulu to increase the GET by ½% specifically for the purposes of building an elevated rail system.

Ten years ago, as Chair of the Senate Transportation Committee, I was one of the Senate negotiators and I supported the original bill for a 1% increase. However, during the course of the hearings, the Oahu Senators and State House of Representatives did not support it and ended up with the final ½%. Had we stayed with the 1%, we would not be in this position today.

As my District 4 constituents know, there is now a proposal under consideration to have the neighbor islands assist with rescuing Oahu on their shortfall by using – or more accurately, absconding – some of the Transient Accommodation Tax generated by Hawaii Island hotels. I absolutely cannot support this.

I have been in my district the last several days and all of those we have spoken to, and also many emails that I’ve received are not in support of paying into the rail shortfall. I have also circulated a poll and it is resoundingly opposed to this. My constituents have shared widely differing reasons for opposing use of neighbor island-generated TAT for rail on Oahu, and I agree with many of their reasons. Bottom line: it is not fair or equitable. The people of Hawaii County are already shouldering a recent increase in taxes – both property and fuel taxes. I will support my constituents first and foremost and those outside of my district on Hawaii Island and oppose such a proposal.

Question 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?

My answer is YES. For the sake of my constituents, I must reiterate that this 0.5% GET Surcharge would apply only to Oahu, not the neighbor islands. I would support it but must also note that this proposed 6-year extension would not fully fund the shortfall. My preference is to support the City and County of Honolulu’s and the rail authority’s request to extend the Surcharge for an additional 10 years – to cover the shortfall – thereby not touching the Transient Accommodations Tax. I must add however, that even a 10-year GET Surcharge extension for Oahu is problematic because it would primarily be used for building the rail.
What about operational and maintenance costs going forward? They are not in the equation. This is why the County’s original request was to extend the GET Surcharge in perpetuity. Bottom line, this option, while it would address federal government funding requirements in the short term, it really amounts to kicking the can down the road for the next generation to resolve. This is sad.

Question 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?

My answer is YES. I have shared a recommendation to allow the City and County of Honolulu the option to raise an additional 1% with Legislative leadership. I also believe such an increase may have to go for several more years as a 2-year extension may not fully fund the shortfall.

Thank you, Damon, for helping the people of Hawaii, especially neighbor islanders, understand what’s at stake and have their voices heard.

Sincerely, Lorraine R. Inouye
Senator, District 4 (Hawai’i Island – North Hilo-Hamakua-Waimea-Kohala-Waikoloa-North Kona)

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