The Search of Honolulu’s ‘Holy Rail’ Brings Largest Tax Hike in Hawaii’s History-Tax Kicked in Jan. 1 on All Oahu Sales and Services; Fight Over Rail Project Continues for at Least Three More Years

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The Honolulu City Council voted Dec. 22, 2006, to build a multi-billion “fixed guideway system” from the west side of Oahu to the University of Hawaii. The unions, developers, bankers and big landowners are driving the campaign for a rail transit along this 28-mile route with seven of nine council members on their side. Honolulu Mayor Mufi Hannemann is one of the project’s biggest cheerleaders.

The state Legislature in 2005 gave the city the authority to raise the state’s 4 percent General Excise Tax to pay for the project. Gov. Linda Lingle also gave the rail her blessing on July 11, 2005, refusing to veto the bill that authorized the Council to raise the General Excise tax. The bill is now on the books as Act 247. By doing so, the governor broke her 2002 pledge to voters never to increase taxes. Oahu