Rail taxes beat forecast by $8.3M | Honolulu Star-Advertiser

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Seesaw tax revenue collections from quarter to quarter continue to confound those overseeing Honolulu’s rail project.

Rail officials announced Monday that for July, August and September, the transit project will receive $64.8 million from Oahu’s general excise tax surcharge to fund construction. That’s $8.3 million more than what the Honolulu Authority for Rapid Transportation had expected to take in for the quarter, based on the project’s financial plan.

It also represents a positive swing when compared with the equally negative swing in the previous quarter. For April, May and June, GET revenues were exactly $8.3 million below what was projected in the financial plan, according to HART.

In the two quarters before that, rail’s GET revenues came in more than $1 million and $9 million above what the financial plan had projected, respectively. State Department of Taxation officials have pointed to a lag in processing tax returns as a key reason for the swings. HART officials, meanwhile, said Monday that they still don’t fully understand what’s causing the swings.

Despite all the fluctuation, GET collections for rail remain overall $30.5 million below projections. HART officials expect that gap in collections to swell to $100 million by the end of construction.

Along with soaring local construction costs, HART officials have pointed to the lag in revenues as another factor in the project’s massive budget shortfall. The 20-mile, 21-station system was expected to cost $5.26 billion, but costs have since spiked to an estimated $6.57 billion.

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HART reports that $1.58 billion in state rail tax revenues have been collected since Oahu’s 0.5 percent surcharge began in 2007. That’s the amount after the state’s 10 percent administrative fee, which is being challenged in court.

Rail officials acknowledge they still don’t know what the final price tag will be to build the transit system. The city doesn’t expect to have all rail’s remaining construction contracts signed until next summer, and the project isn’t slated to be finished until 2021.