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August 2005

President's Message
Discuss Developing Kakaako on July 26 (Pearl Johnson)
Suggest Changes to City Charter (Evangeline Funk & Piilani Kaopuiki)
British Columbia's Grassroots Reform (Dorothy Cornell)
Council Report (Malia Schwartz)
Transit Tax Circus (Charles Carole)

Transit Tax Circus

We have a transit tax circus with three or four rings. These rings are occupied by the Governor, the State Legislature, the City administration and finally the public. You have heard enough about the first three rings of the circus since July 10, but the public ring hasn't been given much publicity in the press.

The League of Women Voters Honolulu Board gave conditional support to the City's Bill 40 which increases the excise tax for transit. The conditions were: 1) before the tax begins, the City must select a locally preferred alternative following an Alternative Analysis and Draft EIS, 2) the City must have an operational, financial, development and route plan for the locally preferred alternative, and 3) commitment of federal funds to further the locally preferred alternative.

The City Council said that they would not spend any excise tax funds before these conditions were met, but they will start collecting 0.5 percent excise tax on January 2007. It is quite possible that these conditions might not be met for two or three years after 2007, but they will still be collecting funds during that period.

We know that raiding of special funds on State and City levels that has taken place. Since there are no real plans or cost estimates for the preferred alternative, whatever that might be, it might be necessary to have additional 0.5 or 1.0 percent increase to raise the excise tax to 5.0 or 5.5 percent. We have the Seattle monorail case that started out as 2 billion dollars and is now estimated to cost nearly 10 billion dollars.

This is a City project. It's possible to repeal the 12.5% general excise tax increase by initiative in 2006 or 2008 elections. The circus has just begun.

Charles Carole
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