EXECUTIVE SUMMARY: The Committees are considering various options to assist the City & County of Honolulu in financing a rapid transit system. This testimony discusses various financing options and constitutional and statutory restrictions on them.
General Excise Tax Surcharge: It must be remembered that this surcharge is not the State’s money. The State authorized the counties to adopt taxing ordinances under certain conditions and is assisting with collecting and remitting the surcharge funds to the counties; however, the tax is imposed by county ordinance, not state statute. The county ordinance only impacts businesses and residents of the county enacting it. The State’s ability to enact oversight restrictions and conditions affecting this money is limited.
State Tax Monies: Monies raised from statewide taxes, such as the General Excise Tax and the Transient Accommodations Tax, do belong to the State and may be disbursed by the State. Because the tax is imposed by state statute, it impacts businesses and residents throughout the State. The State’s ability to enact oversight restrictions and conditions affecting this money is broad.
County Property Tax Monies: Monies raised from real property taxes unquestionably belong to the counties under the Hawaii Constitution as it now exists. The State has no ability to enact oversight restrictions and conditions affecting this money.