Legislature reaches rail funding bill agreement

  • 5838330_web1_state-logo.jpg

KAILUA-KONA — More details of a new plan to raise $2.37 billion to bail out the financially troubled Honolulu rail project were released on Thursday.


KAILUA-KONA — More details of a new plan to raise $2.37 billion to bail out the financially troubled Honolulu rail project were released on Thursday.

The state Legislature is scheduled to meet in a special session next week to debate and vote on a bill that would provide more funding for the rail project, the Honolulu Star-Advertiser reported. Members of the House and Senate met in closed-door caucuses at the state Capitol Thursday to review the latest proposal for providing more funding for rail.

The bill, drafted by House and Senate Committee Chairpersons, calls for raising the transient accommodations tax from 9.25 percent to 10.25 percent for 13 years to provide an additional $1.326 billion; a permanent increase the counties’ share of the transient accommodations tax from its current $93 million base to $103 million; extending Oahu’s general excise tax surcharge through December 2030 to provide an additional $1.046 billion; reducing the so-called “skim” of revenue that the state takes from the general excise surcharge collections on Oahu; and require the state auditor to conduct an audit of spending and annual financial reviews on the rail project, according to a late Thursday media release from the Legislature.

The partially built rail line’s cost has increased from $5.26 billion in late 2014 to nearly $10 billion.

House Speaker Scott K. Saiki (Kakaako, Downtown, Oahu) said the $2.378 billion funding shortfall package will fund the rail project through Ala Moana and will not jeopardize the $1.55 billion in federal funding.

“By working with our colleagues in the Senate, the Legislature has come up with a concrete plan to fund the rail project that will reduce the overall costs while shifting some of the regressive tax burden away from our residents, who are struggling to make ends meet,” Saiki said in the prepared statement. “This plan will not have a direct impact on neighbor island county budgets.

“We have taken a long look at the rail project and have heard the concerns of residents during our joint public hearing on rail funding this month. This is a critical infrastructure project for Hawaii. We are not giving the City a blank check but instead insisting on audits and financial reviews and expenditures to provide complete transparency for our taxpayers.”

Gov. David Ige said Thursday he was elated that legislators came to an agreement that will move the rail project forward.

“I look forward to hearing the public’s input during next week’s special session. I firmly believe transit is a strategic asset for our communities that will enable us to provide affordable homes for our families while preserving open space outside the urban center,” he said.


During the regular legislative session session this year, lawmakers failed to agree on a package that would provide additional funding to complete the project.

The city has a Sept. 15 deadline to show the Federal Transit Administration how it plans to raise the money to cover the project’s budget shortfall, according to the Star-Advertiser.