State lawmakers are still considering allowing Honolulu to extend its General Excise Tax surcharge for rail, but have said they won’t do it without a commitment from the city to come up with other funds for the $10 billion project.

The Honolulu City Council took the first steps toward complying with that demand this week by giving preliminary approval to Bill 42, which adds just one word — “city” — to the list of sources that can be used to fund rail. It would open the door to using property tax revenues.

Property taxes are the the city’s primary source of revenue, projected to pay for 48 percent of operating costs in fiscal year 2018.

Cory Lum/CIvil Beat

The bill passed in one of a series of 5-4 votes Wednesday night, with council members Trevor Ozawa, Ann Kobayashi, Carol Fukunaga and Ernie Martin voting against it.

Fukunaga cited concerns among her elderly constituents over using property taxes to fund rail.

Others expressed concerns about using city funds on the project, but said the bill should get an initial consideration and that the council must wait to see what state lawmakers decide to do.

The Legislature has a Friday deadline to act on the rail tax bill, Senate Bill 1183.

“I’ll see where it goes in committee and make a decision at that point,” Councilman Ikaika Anderson said. “But please understand that my ‘aye’ vote tonight in no way signals my intent to continue supporting this going forward.”

If the Legislature passes SB 1183 with a sufficient extension of the GET surcharge, it would render Bill 42 “moot and irrelevant,” Councilman Ron Menor said.

“We’re taking this measure up for discussion purposes only,” Menor said.

The council also gave Bill 45 a first reading. It would limit the use of GET surcharge revenue to rail construction. The funds can currently be used on HART administrative, operating and personnel expenses.

The bill would also prohibit those funds from being used for the project’s compliance with the Americans with Disabilities Act.