Honolulu mayor plans 3 tax hikes to cover future rail costs

  • In this May 30, 2017, file photo, a rail car tops an elevated rail line in Waipahu, Hawaii. (AP Photo/Cathy Bussewitz, File)

HONOLULU — The mayor of Honolulu has proposed a trio of tax increases to cover costs of a forthcoming rail line, a report said.

The budget by Mayor Kirk Caldwell includes tax hikes designed in part to cover the city’s rail operations and maintenance, The Honolulu Star-Advertiser reported Monday.

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The increases in property taxes on hotels and the most expensive Oahu homes, as well as a new rubbish pickup fee, will take effect in the budget year beginning July 1 if approved by the Honolulu City Council, according to the Democratic mayor.

The Honolulu Authority for Rapid Transportation estimates costs of $127 million to $144 million a year once the entire 20-mile train line opens. The authority plans a partial opening of 11 miles of the rail line in December 2020.

If the proposed tax increases pass, the city general fund that will provide the rail subsidy “will be healthy and, I think, sufficient to cover those costs,” Caldwell said.

The city also needs the extra tax dollars for other city costs including bus operations and trash pickup and disposal, he said.

Councilwoman Heidi Tsuneyoshi does not expect the refuse fee will pass and said she is surprised the mayor is citing rail operations as a justification.

“That still doesn’t answer the basic concerns as far as what is that actual cost that they’re looking at,” she said.

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The cost of the rail project has skyrocketed from about $5.2 billion to about $9.2 billion, forcing city officials to seek bailouts from the Hawaii Legislature in 2015 and 2017 that totaled billions of dollars. The 2017 bill increased the transient accommodations tax statewide by 1 percent, with the proceeds earmarked for the rail project.

Information from: Honolulu Star-Advertiser, http://www.staradvertiser.com

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