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The Honolulu Advertiser
Posted on: Friday, June 9, 2006

Mayor, governor argue over excise tax issue

By Robbie Dingeman and Gordon Y.K. Pang
Advertiser Staff Writers

Gov. Linda Lingle and Mayor Mufi Hannemann traded barbs yesterday over whose job it is to collect the excise tax increase scheduled to begin in January on O'ahu to help pay for a long-awaited mass-transit solution.

Lingle said that she was surprised that Hannemann couldn't get the City Council to support putting up a $5 million guarantee.

"The Legislature failed to put the money into the budget in order to allow us to go and collect that money for the city," Lingle said.

So it's up to the city to guarantee payment of the cost of collecting the additional tax, Lingle said. The city is counting on the increase in the general excise tax on O'ahu — from 4 percent to 4.5 percent — to provide about $150 million a year for a mass-transit system in Honolulu.

Any hurdle to the project worries transit supporters, who have come so close to mass transit in the past only to see plans fall apart. This is the closest the city has come in 13 years.

City planners are analyzing the details of what a proposed transit system would be: how much it would cost, how many people might ride, what kind of technology would be used, all in preparation to have the council choose a preferred route and system by year's end.

But Hannemann said the state law that allowed the tax surcharge beginning in January clearly puts the responsibility for collecting on the state. He quoted the law that the governor declined to sign but allowed to become law: "The director of taxation shall levy, assess, collect and otherwise administer the county surcharge on the state tax."

Lingle said without the money to pay a private company to collect the tax, the state won't go forward.

"The mayor was supposed to go forward and go get that so the project can move forward and he just wasn't able to get the votes and that's too bad," she said.

Hannemann said he is still trying to work out a solution that will help ease traffic for what he sees as a core quality-of-life issue for Honolulu residents.

"We are now going to ask the attorney general to provide us written documentation of why the state cannot collect this tax," he said. "It is the law; the governor must follow the law."

Transit has been debated for years but always bogged down in the past in cost concerns and political debates.

Earlier this week, Hannemann said he would consider taking the state to court over the matter if another solution could not be found.

Lingle said the mayor is starting to develop a pattern: "When he doesn't get what he wants, he tries to blame someone else."

Hannemann said the law does not provide a way for the county to collect the tax and that the governor is stalling because of her pledge to not increase taxes.

"The governor continues to be in denial," Hannemann said. "She's scrambling now to say she's been consistent all along."

Lingle said the company the state will hire to collect the county surcharge won't go forward without a guarantee that the money will be paid next year.

"I think right now she's setting herself up to be the Rene Mansho of this new transit debate," Hannemann said. Thirteen years ago, then-City Councilwoman Rene Mansho cast the deciding vote against mass transit.

"Everybody's going to look to her (Lingle) as the reason why transit has failed this time around," Hannemann said.

He said Lingle needs to offer another solution to drivers stuck in traffic if she won't help the city. "The people are dying for traffic relief," he said.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com and Gordon Y.K. Pang at gpang@honoluluadvertiser.com.