formerly The Alliance for Traffic Improvement

Seeking cost effective ways to reduce traffic congestion on Oahu


Editorial, 6/26/05

Heads are going to roll ...

We will have to assume that the Governor is going to let HB 1309 pass despite the business community's objections. Small business is unanimous in their objections to the tax, the Business Roundtable objects to the tax without a sound and acceptable plan in place, which is also the Advertiser's position. The Chamber supports the tax, of course.

As for the "home rule" excuse, here are some thoughts.

First, HB 1309 is not “home rule” since it dictates to the counties precisely what they can, and cannot, do with the taxes collected. HB 1309 states, “The … tax shall not be used to build or repair public roads or highways, bicycle paths, or support public transportation systems already in existence …” Effectively, the bill only allows trains and thus prejudices the outcome of the Alternatives Analysis process.

Second, that HB 1309 is not “home rule,” but rather a tax increase, is evident from the lack of a commensurate cut in the state GE tax.

Third, it is not “home rule” since the counties already have the authority to raise gasoline and property taxes but have not chosen to do so. Visitors pay a considerable portion of property taxes and residents can deduct such property tax from federal taxes. Adopting the property tax approach would mean a net cost to the resident community that would be less and, in addition, it would be a progressive, instead of regressive tax.

Finally, that it is not “home rule” is obvious since three out of the four counties have rejected the “home rule” that the bill supposedly offers. These counties would only reject “home rule” if HB 1309 was not “home rule,” but rather, a tax increase — pure and simple.

According to Councilmember Garcia, it would take a 55 cent per gallon increase in the county gasoline tax, or a 45 percent increase in county property taxes, to raise the same tax revenue as forecast for HB 1309. Such large tax increases would be unacceptable to voters since it would be obvious what it would cost them.

The legislature’s sole purpose in using the GET as the tax increase vehicle is to hide from the voters the enormity of the tax increase needed for rail transit.

Next, the political establishment knows that the ˝ percent tax hike is only the beginning of a series of tax increases that will be necessary for the rail transit line.

Mayor Hannemann had originally stated that he needed a full one percent hike to fund a $2.64 billion line from Kapolei to Iwilei. Since then he has expanded the line to UH, which will increase the cost by $960 million (15 percent greater than the per mile cost of the original line). In addition, legislators reduced the tax increase in HB 1309 to a ˝ percent.

For the mayor and city council to pretend that the ˝ percent will be sufficient to fund the rail line is nothing more than a confidence trick they are playing on voters. The project as outlined will require funding of up to a 1˝ percent increase to complete the rail line within the 15-year period SPREADSHEET

Lastly, the rail transit plan described by the Hannemann Administration will cost $3.6 billion before cost overruns. The federal government will provide no more than $500-$600 million leaving $3 billion to be paid for locally. On a per capita basis, allowing for inflation, the Honolulu rail project’s local cost will be not only greater than any other rail project in the history of the U.S., it will be five times greater than the next most expensive one — San Francisco’s BART .

Take, for example, Houston whose $300 million rail line with a 4,700,000 population gives them costs per capita of $64. This is less than half of the per capita cost of the Convention Center — and I couldn’t get too excited about that either. However, Honolulu’s rail line shows needing a local share of $3 billion to be paid by a 900,000 population, or $3,300 per capita. And that is before cost overruns.

This is a scheme that is not only crazy — it is thoroughly dishonest. If they try to push this through, heads will deservedly roll.