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CITY
COUNCIL
CITYANDCOUNTYOF
HONOLULU
No
11
91
HONOLULU,HAWAII
RESOLUTION
URGINGTHE
HAWAIISTATELEGISLATURETOPROVIDE
THE
CITYAND
COUNTY
OF
HONOLULU
ALLPROCEEDS
OF
THE
COUNTYSURCHARGE
ON
STATEEXCISE
TAX
NOT
NEEDED
TO
ADMINISTER
THE
SURCHARGE.WHEREAS,
the
Council
enacted
Ordinance
05-027,
establishing
a
one-half
percent
surcharge
on
thestate
generalexcise
and
use
tax
(hereinafter
“countysurcharge”)
to
fund
a
mass
transit
projectpursuantto
Act
247,
Session
Laws
of
Hawaii
(hereinafter
“SLH”)
2005
(hereinafter
“Act247”),
the
proceeds
of
which
are
collected
by
the
State;
and
WHEREAS,
Act
247provides
that
the
Stateshall
deduct
ten
percent
of
the
gross
proceeds
of
a
respectivecounty’ssurcharge
to
reimburse
theState
for
thecostsofassessment,
collection,
and
disposition
ofthecounty
surchargeincurred
by
the
State;
and
WHEREAS,
the
City
began
receiving
county
surcharge
proceeds
in
Fiscal
Year
2007;
and
WHEREAS,according
to
a
department
of
taxation
report,theState
collected
$187,903,947
of
county
surcharge
proceeds
for
fiscal
year
2008
andretained$18,790,395
of
that
amount
as
its
reimbursement
for
thecosts
of
assessment,collection,and
disposition
of
the
county
surcharge;and
WHEREAS,according
to
the
department
of
taxationfigures
for
thefiscal
year2009,
theStatecollected
approximately
$178,729,000
of
countysurcharge
proceeds
and
retainedten
percent
of
those
proceeds;
and
WHEREAS,
themostrecent
department
of
taxation
annual
report
required
by
Act
213,
SLH
2007,
details
the
level
of
staffing
and
funding
necessary
to
administer
county
surchargecollections,
identified
23
positions
costing
$749,876
for
fiscal
year
2008
and20
positionscosting
$700,508
forfiscal
year
2009
that
support
thecollection
of
thesurcharge;
and
WHEREAS,
based
on
the
above,
theamountsbeing
retainedby
the
State
each
year
aregrossly
in
excess
of
the
funding
needed
to
collect
thesurcharge,amountingto
between
$17
million
to$18million
in
unwarrantedpayments
in
themostrecentyears
for
whichdata
on
the
county
surcharge
are
available;
and
OCS/022511/12:45/HM
1
 
CITY
COUNCIL
CITYANDCOUNTY
OF
HONOLULU
No
11
91
HONOLULU,HAWAII
RESOLUTION
WHEREAS,the
Council
finds
it
unconscionable
that
theState
annually
keepsmillions
of
dollars
of
county
surcharge
proceeds
to
reimburseitself
for
costs
related
to
administering
the
surcharge
which
are
far
less
than
theten
percentretained
by
the
State;
and
WHEREAS,the
Council
further
finds
that
retention
by
theState
of
millions
of
taxpayer
dollarsintendedto
fund
a
mass
transit
systembutnot
used
for
the
transit
system
undermines
the
justification
for
establishingthe
countysurcharge
and
weakensthecity’s
ability
to
implement
a
successful
mass
transit
system;
and
WHEREAS,the
Council
further
finds
that
theretention
of
theten
percent
of
county
proceeds
is
simply
a
way
for
theStateLegislatureto
dealwith
theState’s
financialproblems
without
theLegislature
assuming
the
responsibility
of
raisingtaxes
or
cutting
government
services,
or
both,to
do
so;
now,
therefore,
BEIT
RESOLVEDby
the
Council
of
the
City
andCounty
of
Honoluluthat
it
urges
the
Hawaii
State
Legislature
to
immediately
amend
State
lawtoreducethe
amount
of
the
countysurchargeretainedby
theState
to
more
closelyapproximate
the
cost
ofcollectingand
disbursing
thecountysurcharge;
and
BEIT
FURTHER
RESOLVED
that
in
orderto
determine
the
amount
needed,theLegislature
is
requested
toprovide
that
the
cost
of
administering
the
surcharge
be
subjecttoverification
by
independent
audit;
and
2
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