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The Honolulu Advertiser
Posted on: Saturday, October 10, 2009

Rail tax collection down 19%


By Sean Hao
Advertiser Staff Writer

Transit tax collections fell 19 percent last month compared with September 2008 to nearly $13.4 million, according to figures provided by the state Department of Taxation.

A half-percentage-point surcharge was added to the general excise tax in Honolulu in January 2007 to fund the rail. Collections in September 2008, when state economic growth was stronger, totaled $16.6 million.

Through the first three months of the current fiscal year, transit tax collections are up nearly 2 percent to $42.4 million. Average monthly collections were $14.4 million. Those figures account for the 10 percent the state takes off the top to pay for administering the tax.

The city had anticipated raising an average of $16.5 million a month in the current fiscal year to pay for the planned 20-mile East Kapolei to Ala Moana elevated commuter train.

However, according to a recently revised financial plan, that fiscal 2010 train tax collection forecast was reduced from about $198 million to $164 million. That's an average of $13.7 million a month.

Overall, that August-dated financial plan for the $5.5 billion rail line anticipates a $360 million shortfall in tax collections through 2022. The city expects to rely on increased federal funds — including diverting federal money intended for TheBus — to help make up for the lower-than-anticipated tax revenue and higher costs, according to the financial plan.

Under the updated financial plan, the city now expects transit tax revenues to total $3.52 billion. When combined with $174 million in actual transit tax collections in fiscal 2007 and fiscal 2008, the city's total anticipated transit excise tax take rises to about $3.69 billion. That's about $360 million less than the $4.05 billion in transit tax revenues forecast by the city in a draft environmental impact statement in October.

During fiscal year 2009, which ended June 30, transit tax collections fell short of the October forecast by $27.1 million. However, in the August financial plan, the city cut its forecast for 2009 tax collections and, as a result, the shortfall was converted into a $12 million surplus.