Folks who follow this blog know that one of my biggest peeves is the 10-percent cut the state is taking from the half-cent excise tax for O’ahu mass transit to pay for nonexistent state collection costs.

The state rakes in $15 million a year from its share of the transit tax, almost all of which is clear windfall profit for the state, with actual collection costs budgeted at only $700,000 next year.
It amounts to a back-door general tax increase that legislators can spent on non-transit projects anywhere in the state. The siphoning unnecessarily inflates the cost of rail transit, already the most expensive public works project in Hawai’i’s history at some $4 billion.

Given the obvious inequities, it’s good to see Mayor Mufi Hannemann finally make an aggressive move to try to get the money back for the city with his proposal to use the $300 million the state will divert over the 20-year life of the transit tax to pay for a 2.1 mile rail spur to the airport.

Hannemann will have to press the Legislature hard to pry the money away, and it’ll be interesting to see if Gov. Linda Lingle joins him. For somebody who ran for office as a tax-cutter, Lingle has been strangely quiet about how the state tacked its own sneaky tax increase onto the city’s transit tax.

I have more on the subject in my column in the Opinion section of today’s Advertiser, “Transit windfall a gross misappropriation.”

Update: I received the following email from Rep. Rida Cabanilla. I felt I laid it at the Senate’s feet by naming two senators who have been most publicly visible in blocking the legislation (the whole Legislature approved the 10-percent kickback in the first place), but she makes fair points and offers interesting insights:

Dear Dave,

Your comments today are inaccurate. Instead of accusing all legislators you should limit it to senators. HB 724 which will do just what you are asking for passed unanimously in the House. It was the Senate who refuse to hear it. You might find it interesting that when I was walking the floors of the Senate to force them to schedule the bill for a hearing, the comment to me was, “Why are you the one asking us, it should be the Mayor?” So, I repeatedly called the Mayor’s office and notified the City Council members to help me lobby Senator Fukunaga to schedule the bill for a hearing, finally on the third day his Managing Director whose name I cannot remember this very moment called and said “the Mayor does not want that matter opened at this time.”

HB 724 HD1 specifically asked that the State withhold only the amount necessary to process the tax and nothing more. Unlike what you said, not every one in this building consider it their birthright to cockroach money. Please review the attachments and make the proper corrections.

Rida Cabanilla

Tags: Legislature, Linda Lingle, mass transit, Mufi Hannemann, taxes

This entry was posted on Wednesday, May 28th, 2008 at 3:00 am and is filed under Volcanic Ash. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.