HONOLULU -- Democratic leaders at the Legislature and Gov. Linda Lingle have reached a deal that will allow the transit tax to become law.

A letter sent from Senate President Robert Bunda and House Speaker Calvin Say turned the tide. The letter promised the governor that lawmakers would introduce a bill during next year's session that will satisfy the governor's concerns over the bill.

Video

Watch News Report

"Specifically we will introduce legislation to amend the bill so that the counties are responsible for collecting and assessing the 0.5 percent surcharge," Say said.

Lingle had said on Friday that she planned to veto the bill.

---

Web Site: Governor's Web Site
Discussion: Transit | Taxes

---

"Hooray for an agreement. And I'll tell you what, being a person who is in gridlock every afternoon, I am glad we can proceed with a project," Bunda said.

The governor said the sincerity of lawmakers and the mayor persuaded her not to veto.

"I don't want it to be that anybody won or lost. It was a compromise that every felt good about," Lingle said.

Mayor Mufi Hannemann cut short a trip in Japan to come home to make sure the transit bill survived.

"Let me make it real clear, this is not just an issue about traffic gridlock -- this is an issue about quality of life, but also about the economy," he said.

Lingle's concerns centered on how a one-half percentage point surcharge on the state's general excise tax would be collected. She wanted the counties, not the state, to be the ones that collect the tax.

They also said that the counties that intend to opt in on the tax start setting up a collection system so it's in place and ready by Jan. 1, 2007.

The tax bill would give Hawaii's counties the ability to hike the GET from 4 percent to 4.5 percent.

The Honolulu City Council has voted on a measure that would approve the tax hike if it clears the state level. The council has scheduled a final vote on that measure for Aug. 10.

The transit tax bill veto has been averted, but lawmakers still will go back into special session Tuesday to override about a dozen of the 28 other bills the governor vetoed.

Among Lingle's vetoes was the workers' comp bill. The governor said it blocked state rules to improve the care and compensation of injured workers. Lawmakers said the governor's rules make it more difficult for injured worker to get needed treatments.

Lawmakers also expected to override the governor's veto of a bill that would have allowed lawmakers to use money from the Hurricane Relief Fund. Lawmakers said they need $8 million from the fund to beef up the State Civil Defense system. Lingle said she will allow the volunteer employees’ beneficiary association (VEBA) trust bill to become law without her signature. That's a measure to allow the teacher's union to opt out of the state's health insurance plan and purchase an independent plan for teachers.