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Up to 50% of a new hotel tax fund could go to the Honolulu Railroad, estimated to cost less than $ 11.4 billion


A Honolulu city council committee on Wednesday agreed to allocate between one-third and one-half of the revenue from a proposed visitor’s bed tax to the city’s rail transport project. The council’s action came as city officials said the potential rail budget deficit was not as severe as previous projections.

Earlier this year, the Hawaii state legislature voted to take revenue from counties from the state transitional accommodation tax, or TAT. The move blew up a $ 45 million hole in the city’s annual budget.

However, the legislator allowed counties to collect their own TAT of up to 3%.

While Maui and Kauaʻi quickly approved bills to establish the tax, Honolulu’s efforts were bogged down by discussions over whether some of the money should be directed to the beleaguered rail project.

The Blangiardi administration asked the board to allocate 1% of the TAT to the Honolulu Railroad for two years and then increase it to 1.5% thereafter, or 50% of TAT funds.

The remainder would go to the city’s general fund, with some to be used “to mitigate the impacts of visitors on public facilities and natural resources, including the restoration, operation and maintenance of beaches and parks.”

The city’s chief executive, Michael Formby, told committee members that TAT revenues are essential to completing a functioning rail system.

“It’s really about our communities, our neighbors, our fellow citizens, especially our rural communities dependent on public transportation – those outside of the city of Honolulu where housing is more affordable and abundant, but often remote and separate from jobs, ”Formby said.

“The city has long been committed through its public transport system to subsidize the cost of connecting these communities, these fellow citizens, with their work, with parents, with resources, with service providers, with hospitals, with government, with churches, temples – we’ve made that commitment. And it’s about honoring that commitment, ”he said.

Officials from the Honolulu Rapid Transit Authority said after a preliminary independent audit, the budget deficit for rail is now estimated at just under $ 2 billion. That’s down from an estimate of $ 3.5 billion announced in March.

HART Executive Director and Interim CEO Lori Kahikina said the revised figure reflects the conservative nature of the previous estimate, as well as reductions in staff and consultants, and savings from the so-called change in Mauka, who would move the tracks to the other side. of Dillingham Boulevard from original plans.

Kahikina says they currently have enough money to operate the rail line just past Chinatown, but HART is not wavering in its resolve to complete the entire line to Ala Moana.

The new estimated cost to reach Ala Moana is $ 11.4 billion, including financing costs, she said. The previous estimate was $ 12.4 billion.

The 4 miles from Middle Street to Ala Moana is the most complicated part of the project, mainly due to the need to relocate utilities and secure rights of way.

The budget committee voted 5 to 1 to move the hotel bed tax measure to the full council for final approval in December. Council member Heidi Tsuneyoshi, who criticized the use of TAT revenues for rail, was the only one voting against.

Honolulu Authority for Rapid Transit

Click here to read the committee’s November 17 version of the proposed measure.

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