HONOLULU (AP) — Hawaii lawmakers have yet to agree on a funding deal for Honolulu’s multibillion-dollar rail project.
The House rejected a Senate proposal Tuesday that called for extending the excise tax surcharge for rail for another decade to help fund the project. Meanwhile, the Senate rejected a proposal to boost hotel taxes by 2.5 percent.
House Transportation Committee Chairman Henry Aquino is now proposing increasing the hotel room tax by 1 percent for 11 years. He says the plan to put up more than $1.7 billion for the partially built project would provide more rail funding than any other proposal brought forward so far.
“I feel this is a responsible floor amendment, and it addresses many of the concerns that we received,” Aquino said.
But other House lawmakers said the new proposal would result in Honolulu losing $45 million a year in hotel room taxes the city now receives from the state. That money would go toward the rail project under Aquino’s proposal.
Tourism industry officials issued a statement Tuesday in opposition of using hotel taxes for rail.
“We are opposed to tapping into the (hotel room tax) as a funding mechanism for Honolulu’s rail project and continue to believe that the (excise tax surcharge) is the more appropriate funding mechanism,” the Hawaii Lodging & Tourism Association said.
Cost estimates for the rail project have gone from about $5 billion in 2014 to nearly $10 billion.
If the House and Senate can’t agree on a funding bill, the city of Honolulu will have to find its own funding solution for the rail project. The 2017 legislative session is scheduled to end Thursday.