Gov. David Ige has officially approved the extension of the controversial half-percent excise tax surcharge to provide more money to cover cost overruns on the $6 billion Oahu rail project.

The new law extends the rail surcharge for an additional five years. The tax had been scheduled to expire in 2022, but will now be extended to at least the end of 2027. 

Honolulu Mayor Kirk Caldwell has asked lawmakers to make the surcharge permanent to cover the projected operating losses for the rail system, and to pay to construct additional extentions of the system to Kapolei and Manoa.

“The primary reason I signed this bill is because we made a commitment years ago, and we must keep this commitment to see rail to its completion,” Ige said in a written statement announcing he had signed the bill.

“I, too, have concerns about cost overruns,” Ige said. “The excise tax is an investment by the taxpayers of Hawaii, and my job is to ensure that their hard earned money is being spent efficiently, effectively and productively.”

To pursue that goal, Ige said he is asking the Honolulu Authority for Rapid Transportation to provide him with annual progress reports on the revenue, costs and progress of the rail project.

“This report will be shared with not only my administration, but with the legislature and the public, and it will be measured against specific goals and targets,” Ige said in a prepared statement.

Ige said the annual report will be used as a tool to guide policy makers in the future “to ensure the project stays on schedule and on budget, and to inform the public of the status of their investment.”