HILO — A House-Senate conference committee breathed new life Wednesday into Mayor Harry Kim’s request for a general excise tax surcharge by extending the deadline for the County Council to approve the measure.
It’s estimated the half-cent county surcharge to the state tax would add $50 million annually to county coffers.
But so far, the council has been reluctant to pass it. After letting a March 31 deadline run out, the council is expected to take up the measure at its May 9 meeting. Only three of the nine council members voted in favor of the bill in committee.
Kim has been lobbying the Legislature to give him more time to persuade the council the tax increase is needed. With time running out before the May 3 end of the legislative session, the mayor asked legislative leaders to pass an extension anyway.
“I again thank you for letting this bill advance this far, and for giving me the time to round up the votes at the Hawaii County Council to approve a GET surcharge,” Kim told Senate Ways and Means Chairman Donovan Dela Cruz and House Finance Committee Chairwoman Sylvia Luke in an April 19 letter. “I have done what I can to secure the necessary votes, but I have not yet succeeded. I haven’t given up, but I know you cannot wait forever.”
A half-cent GET surcharge would add 54 cents in tax to a $100 expenditure. Currently, all the GET collected, 4 cents on the dollar, goes to state, not county, coffers.
HB 2587, approved with amendments by the conference committee Wednesday afternoon, contains two deadlines, Kim said. It also expands the allowable uses for the money, so that up to 40 percent of the proceeds could be used for non-transportation purposes and up to 2 percent could be spent on private roads used by the public.
If the council approves the surcharge and Kim signs it by June 30, it would go into effect Jan. 1. If the council passes it and the mayor signs it by March 31, 2019, it would go into effect Jan. 1, 2020.
Kim said Wednesday that he’d like to pretend the second deadline doesn’t exist and just concentrate on the first one.
“I have to keep pushing for what I think are the needs of this county,” Kim said, naming mass transit, police and homeless services as priorities. “Nobody wants to raise taxes … but this is about the future of this island.”
Council Chairwoman Valerie Poindexter, who previously voted against the county measure, Bill 102, said the changes to the allowable expenditures could cause procedural hurdles to the bill.
“The question is, do we have enough time,” she asked.
“The bill would need to be amended to reference the new act that provides for the extension,” she said. “Here is where it gets tricky. If the parameters of allowable expenditures are changed to allow for other types of expenditures, a new bill would need to be introduced. This would start the entire process over again, which includes a public hearing.”
The House conferees passed the extension 3-1, with Luke and two fellow Democrats voting yes, and Oahu Rep. Gene Ward, a Republican, voting no. The Senate conferees included Big Island Democratic Sens. Loraine Inouye and Kai Kahele. They voted yes.