LOS ANGELES -- Mayor Frank Fasi of Honolulu has scheduled a special session of the city council for Wednesday to try to revive a crucial excise tax increase for a proposed $1.7 billion rail transit system.
The council dealt a stunning blow to the rail project last week by voting 5 to 4 against the proposed 10-year excise tax increase. The increase, to 4.5% from 4%, would help fund the local share of the 17-mile project.
Rene Mansho, a city council-woman who has supported the project previously, switched sides and provided a swing vote against the rail proposal last week. The council took the vote while all nine were meeting as members of its policy and environment committee.
The light-rail transit system, long a controversial subject in Hawaii, faces a crucial deadline this week. State authority to enact the excise tax increase expires Thursday, and the project might be virtually killed if Mr. Fasi cannot rally support at the last minute.
The five council opponents of the tax increase indicated late last week that the major "doesn't have a prayer" of changing their minds, a source in Honolulu said Friday.
A mix of federal and local funding would help finance the project if it moves forward. Municipal market participants also have a stake in the rail system because Honolulu has studied selling general obligation bonds to help provide up-front construction moneys.
Many people in Honolulu support some sort of transit improvements to address growing problems with traffic congestion. But the rail transit proposal has elicited questions from opponent about cost estimates and ridership projections.
Some citizens have instead suggested expansion of other transit options, such as improved express-bus service.
Proponents of the rail system argue that traffic congestion will become so bad that buses will be unable to provide timely trips.
Discussion about a rapid transit system in Honolulu date back to the 1970s, when it was expected that federal funds might provide funding for about 90% of the cost of a transit project. Since then, however, available federal funds have dwindled, and Honolulu now expects the United States to fund only about 30% of the proposed light-rail system.
The proposed excise tax increase would apply to gross business income, according to a Honolulu official.
Cliff Slater, owner of a local jewelry business, received widespread attention for his efforts to generate opposition to the rail proposal.
Mr. Slater persuaded some small businesses to oppose the plan, but many community organizations remained supportive of the mayor's efforts to move the project forward.
Last week's vote shocked government and business officials who were behind the project, especially because the defeat reversed previous hard-fought successes.
If the committee vote is not reversed Wednesday, it will be extremely difficult to resurrect the rail project in the short-term, a municipal market source familiar with the plan said, adding that a defeat now also could cast a cloud over the project permanently.