There is a difference between using state money (TAT) for state projects and using that same money for county projects (rail).  It's very similar to using county money (rail surcharge) for state projects via the general fund.  Neither one is good policy.

In addition, this may come back to bite Honolulu when the governor attempts to make the tax fairer.  I think Honolulu may end up getting a lower percentage of the TAT (the portion that is granted to the counties) than it has in the past.