30 Aug 2017

Extra taxes proposed to fund Honolulu rail project shortfall

8:05 pm on 30 August 2017

Hawaii's Senate will consider a bill to fund the projected $US3 billion dollar shortfall to complete the Honolulu rail project.

Busy intersection on Kalakaua Avenue on April 27, 2014 in Waikiki, Hawaii Kalakaua Avenue is the favorite luxury shopping strip for tourists visiting Hawaii

Busy intersection on Kalakaua Avenue on April 27, 2014 in Waikiki, Hawaii Kalakaua Avenue is the favorite luxury shopping strip for tourists visiting Hawaii Photo: Copyright: jewhyte / 123RF Stock Photo

The project, now costed at $US9.5 billion dollars, has had major budget blowouts since it began.

The bill proposed a combination of tax hikes including an increase to the hotel room tariff statewide by one percent for 13 years.

It also proposed a three year surcharge on the general excise tax on Oahu and would give the state greater oversight of rail spending.

But Honolulu Mayor Kirk Caldwell said the bill could put the project in jeopardy as the state was not part of the original funding agreement with the Federal Transit Administration.

Mr Caldwell said he suspected funds raised by the bill were unlikely to be enough.

"The House and Senate seems confident that their numbers are adequate and no one wants that to be more true than me. I'd like to say these numbers work for the city and county of Honolulu but according to our anaylsis, and many of you know it, this bill falls short somewhere between six and nine hundred million, maybe more."

Elected officials from Hawaii's other islands had also spoken out against the bill arguing they should not have to pay for the project on Oahu.