HONOLULU (AP) — Honolulu officials have approved a bill that would extend a tax surcharge to pay for the $6.57 billion rail project.
HONOLULU (AP) — Honolulu officials have approved a bill that would extend a tax surcharge to pay for the $6.57 billion rail project.
The City Council Budget Committee voted 4-1 in favor of the bill Wednesday, which extends Oahu’s 0.5 percent tax surcharge from 2022 to 2027. The measure will now be up for another vote at the council’s Dec. 9 meeting, where all nine members are expected to decide on the extension. The final vote on the bill is expected next year.
The committee’s vote Wednesday comes days after Mayor Kirk Caldwell announced that $250 million in funds from the Federal Transportation Administration would be at risk if the council did not approve an extension of the tax surcharge.
The committee supported the extension, even though some councilmembers still had questions about Caldwell’s discussion last week with FTA chief Therese McMillan.
“I was hoping that there would be some kind of communication directly either from him or from his office to the council with regards to that,” said Councilmember Joey Manahan.
The $250 million is part of the $1.55 billion that the FTA promised the city under a grant agreement.
Councilmembers discussed the possibility of not approving the extension and having to pay back those federal funds.
“We can’t use any of the surcharge money to pay back that $2 billion, so that amount would have to come from some other source of funding, primarily property taxes for us,” Manahan said. “We haven’t done the math but I would assume we would have to increase (property taxes). That is a huge amount.”
Councilmembers also decided to approve a $910-million cap on the surcharge extension, instead of the full $1.5 billion that would come from the five-year extension.
The 20-mile rail project will run from East Kapolei to Ala Moana Center.