Rail tax revenue down 30%
By Sean Hao
Advertiser Staff Writer
Tax collections needed to build Honolulu's planned $5.5 billion elevated rail transit line fell 30 percent in October from a year earlier. The total collected — $8.9 million — was the lowest amount since February 2007, when just $2.2 million was collected during the second month after the excise tax surcharge was enacted.
Through the first four months of the 2009-2010 fiscal year, transit tax collections are down nearly 6 percent from the same period a year ago, to $52 million, based on figures provided by the state Department of Taxation. Tax collections have fallen amid declining visitor arrivals and rising unemployment.
That's taking a toll on money needed to build Honolulu's planned 20-mile train from East Kapolei to Ala Moana. The sluggish economy forced city officials earlier this year to lower transit tax collection forecasts from $16.5 million a month to $13.7 million a month.
Through the first four months of this fiscal year, collections are averaging about $13 million a month. The money is raised from a half-percentage-point surcharge added to the general excise tax in Honolulu in January 2007 to pay for the rail system. (All transit tax collection figures in this story do not include a 10 percent administrative fee retained by the state, which collects the taxes.)
City Transportation Director Wayne Yoshioka was unavailable for comment on the drop in tax collections. City officials have said that they expect lower transit tax collections to be offset by lower construction costs and a future economic rebound.
The city also plans to rely on increased federal funding — including diverting $305 million in federal money intended for TheBus — to help make up for the lower-than-anticipated tax revenue.
The city expects transit tax revenues to rise an inflation-adjusted $3.69 billion through 2022 when the surcharge expires, according to an August-dated version of the city's financial plan. In the spring of 2011 the federal government is expected to announce that it will give the city $1.55 billion to help pay for the project.
