House Advances Honolulu Rail Transit Funding Bill

Apr 11, 2017

House Speaker Joe Souki (right with microphone) made an impassioned plea for passage of Senate Bill 1183.
Credit Wayne Yoshioka

State lawmakers advanced a measure today to provide more money for Honolulu’s Rail Transit Project.  HPR’s Wayne Yoshioka reports.

The state House of Representatives approved its version of Senate Bill 1183 to extend the half-a-percentage point General Excise Tax surcharge for the Honolulu Rail Transit Project.   House Finance Committee chair, Sylvia Luke, says a 2-year extension to 2029 plus the return of administration fees should be enough to complete the project.

“This provides $792 million and reduces the state administrative fee which is also known as the skim from 10 percent to one percent, totaling $397 million.  Therefore this bill would provide $1.2 billion which is just enough to cover the rail’s deficit of $1.3 billion.”

Luke says the surcharge extension does not cover a one billion dollar contingency reserve and will require the City to pursue bond financing and seek cost-cutting measures.   GOP Minority Floor Leader, Gene Ward, joined 10 other Democrats and Republicans to oppose additional funding.

“Not one dollar has come from the City and County for this project.  I couldn’t believe that.  Seven years of working and billions of dollars and they haven’t put one dollar in.  And they even have an ordinance that says you will not spend city money for this thing.”

The House version requires the city to repeal its ordinance prohibiting the use of city money for rail.  GOP Representative Lauren Matsumoto joined majority Democrats to support the measure even though it wasn’t ideal.

“The city threatened to raise property taxes approximately 8-to-14 percent to cover the cost.  The 8-to14 percent is in addition to the amount that they say they have to raise in order to cover the cost of operations and maintenance which is another 8-to-10 percent.”

Rail Project at Aloha Stadium
Credit Wayne Yoshioka

But, Kaua’i representative, James Tokioka, says the proposed funding falls short.

“The rail is at the stadium already.  Are we gonna tear it down and stop.  I think all of us want to see this thing work and how we figure it out is the question and concern for my reservations because I don’t think $1.2 billion is gonna be enough.”

House Speaker Joe Souki, nursing a cold, made an impassioned plea to pass the funding bill and support Mayor Kirk Caldwell…

“I give a lot of credit to the mayor.  He has taken shellacking after shellacking and he’ll come back.  He hasn’t given up.  He has a vision  as we all should have a vision.  It’s not for today, it’s not for next week, it’s for the future.  This is our responsibility for our children and our grandchildren.”

Meanwhile, Mayor Caldwell told the news media that the April 30th Federal Transit Administration deadline for the City’s Recovery Plan will require full funding.  He says the current bill passed by the House will be short of what the City needs.

“While the House has given us $1.2 billion more, we need the money now.  We need to finance about $2 billion worth of construction costs and you add the financing to that and it’s not enough.  So if we don’t get an extension of the surcharge to the full 10-years I’m asking, then we have to find other sources of revenue.”

The measure now heads to a joint Senate and House conference committee to work out differences.   Wayne Yoshioka, HPR News.