In 2005, state of Hawaii and Honolulu City Council Lawmakers passed a law creating a 0.5 percent general excise tax (GET) surcharge for the entire state of Oahu to help pay for the Honolulu Rail Project. Collection for the surcharge started in 2007, and to date, approximately $1.2 billion has been gathered. Under the current law, the 0.5 percent surcharge will end in 2022 and would have raised approximately $3.4 billion during that time. Now some lawmakers, including Honolulu Mayor Kirk Caldwell are suggesting to continue collecting this amount forever. Caldwell stated, "If it goes in perpetuity, it would be applied to operation and maintenance of the rail system, along with our bus system."
It is estimated that once completed, the operation cost for the rail system will be over $110 million per year. The concern is how the rail project will pay for this amount once the tax surcharge goes away in 2022. Honolulu City Council's Budget Chairwoman, Ann Kobayashi, commented, "If it did not have a sunset date, I would not have voted for it (in 2005). I assumed that that was all the money that was necessary. I just don't know. I just have to trust them, what they tell me, that it's going to be on time and on budget and that the operations will be covered by ridership and whatever else."
Source: Honolulu Star Advertiser, 4-6-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
