Lawmakers OK $1.2B more for rail, but Caldwell says it’s not enough
December 16, 2017 | 72° | Check Traffic

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Lawmakers OK $1.2B more for rail, but Caldwell says it’s not enough

  • Jamm Aquino / 2016

    Committee members questioned Honolulu Mayor Kirk Caldwell for hours today in what amounted to a very chilly reception for Caldwell’s request for a 20-year extension for the Oahu excise tax surcharge, which provides most of the funding for the city’s rail project.

The House Finance Committee voted tonight to provide an additional $1.2 billion to financially bail out the Honolulu rail project, but Honolulu Mayor Kirk Caldwell said that won’t be enough to get the job done.

Committee members questioned Caldwell for hours today in what amounted to a very chilly reception for Caldwell’s request for a 20-year extension for the Oahu excise tax surcharge, which provides most of the funding for the city’s rail project.

In the end the committee gave tentative approval to a new draft of Senate Bill 1183 that would extend the excise surcharge by just two years — to 2029 — and would provide some other extra funding to the city by reducing the state’s share of the excise surcharge from 10 percent down to 1 percent.

Caldwell said discussions over the surcharge can continue, but “we need about 10 years (extension). We got two.”

“It’s nowhere near what we need, obviously, and so so we’d have to make up the difference at the city level. And of course, where do you get that revenue from? It comes out of real property taxes,” he said.

Caldwell began the discussion with the critically important Finance Committee by apologizing for making his request for help to bail out the rail project, which is vastly over budget. But it didn’t seem to help much.

“I understand how difficult this is for you, because I was here two years ago, and I want to say I apologize for putting you through this again, and I appreciate your patience and understanding, and hopefully your support to get this project built,” Caldwell said.

The mayor said he is asking lawmakers to extend the excise tax surcharge to at least 2047 to make “absolutely certain” the city will have the money it needs to complete the 20-mile rail system without returning to the legislature yet again. “My goal is never to come back again. I’m not coming back again,” Caldwell said.

But state Rep. Matthew LoPresti, (D, Ewa Villages-Ocean Pointe-Ewa Beach) said “I feel like I was lied to” in 2015 when Caldwell last asked for an extension in the excise tax surcharge.

The excise surcharge for rail was originally supposed to expire in 2022, but Caldwell asked the Legislature two years ago to extend the special tax to raise more money because the project was costing more than expected.

Lawmakers agreed to extend the surcharge until 2027 with the understanding that the five-year extension they approved in 2015 would provide enough money to fund the entire 20-mile rail route.

As it turned out, the five-year extension wasn’t nearly enough to cover rail’s ballooning cost. Estimates of the cost of the project have expanded from a projected $5.26 billion in 2014 to as much as $10 billion today, including interest.

State Rep. Gene Ward, (R, Kalama Valley-Queen’s Gate-Hawaii Kai) told city officials that the evolving estimates for the cost of rail raise critical “trust issues” because the voters would never have approved the project had they known it would eventually cost $10 billion.

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