Don’t Ever Play Cards with These Guys!

After years of wrangling and two agonizing near-misses, it looks like there will finally be a mass transit system for Honolulu on the Island of Oahu. To fund most of the $3.7 billion project, the State Legislature added a half-percent surcharge to Hawaii’s equivalent of a sales tax, increasing it from 4 to 4½ percent.

Since the tax surcharge applies to Oahu residents only, the State government will keep 10% of that increase to cover the
“administrative costs” of computing and collecting that extra tax. The rest is turned over to the Honolulu city government because they’re going to build the transit system.

Here’s the rub: by the time the special half-percent surcharge lapses in 2022, it’s estimated that the State of Hawaii will have collected $300 million for their “administrative costs.” Their actual costs, however, will probably be in the $75 million range.

In other words, roughly 225 million dollars collected to pay for the City’s transit system will just be dumped into the State’s general fund instead.

Honolulu’s mayor, Mufi Hannemann, is griping, of course, but key legislators won’t give the extra money back. They need it, they say, for other things.