Finance committee clears path to use GET surcharge for county housing infrastructure

The Hawaii County Council Committee on Finance voted on Feb. 18, 2025, to forward Bill 27 to full council with a favorable recommendation. The bill updates county code to allow revenues from the half‑percent general excise and use tax (GET) surcharge to be expended on "county‑appropriated housing infrastructure costs," aligning local code with the state’s 2024 Act 30.

Councilmember Kerkowitz, who co‑authored the bill with Councilmember Inaba, said the legislation is a first step to let county agencies and the administration evaluate how the county might use GET surcharge revenue to support housing infrastructure such as sidewalks, water and sewer connections, drainage and waste treatment systems. "This would create another way for our county to work with affordable housing developers to create housing, recognizing that, you know, one of the major barriers to that is the cost of infrastructure," Kerkowitz said.

Diana Nakagawa, finance director, told the committee the administration supports the change as a flexible tool and confirmed coordination with the mayor’s office. "I appreciate the conversations that we've had ... and [the mayor] is supportive of this first step in opening up some of these allowances," Nakagawa said.

Corporation Counsel Renee Shaw said Bill 27 largely tracks the language of Hawaii Revised Statutes section 46‑19.8. "As I read the bill 27, it pretty much tracks the language of the HRS provision, 46 dash 19.8," Shaw told members, and she said corporation counsel would work with finance staff on implementation details such as whether reimbursement to developers is permissible under state law.

Committee members asked for clarity about how the county would appropriate and prioritize use of the funds. Deputy Finance Director Malia Kikai and Nakagawa said allocation decisions would occur through the annual budget process and that the county would develop implementation rules and guardrails as needed. Councilmember Onishi asked whether a set percentage should be reserved for transit versus housing; other members said they prefer a roadmap identifying infrastructure needs to guide allocations rather than a fixed percentage.

Finance staff told members the county anticipates roughly $65 million in GET surcharge revenue in the coming budget cycle; Nakagawa said specific allocations will be considered through the standard budgeting process.

The committee raised additional implementation questions the administration and corporation counsel agreed to explore: whether the county could reimburse developers for eligible infrastructure expenses and how the "county‑appropriated" language should be operationalized. The committee approved forwarding the bill to council with a favorable recommendation; the clerk recorded eight members present and voting in favor and one excused (Councilmember Villegas).

Ending: Bill 27 moves to the full County Council; staff and counsel will draft implementation details and potential amendments to define appropriation and administration processes before council consideration.