Ige scorns special session for rail

Gov. David Ige rejected the notion Wednesday of extending the 2017 legislative session to try to salvage a rail-funding deal, calling it a “waste of time” if state legislators don’t already have an agreement in place.

The governor called it “premature” to consider convening a special session if the House and Senate can’t agree on how to solve the Honolulu rail project’s multibillion-dollar budget deficit. A proposed funding deal for the transit project collapsed in the state Legislature earlier this week when the two chambers approved dueling amendments to the rail measure, Senate Bill 1183.

“I think a timeout would be helpful if they are not anywhere close in agreement,” Ige told reporters during a news conference at his office. His remarks came shortly after Hawaii’s four mayors asked Ige in a letter Wednesday to extend the legislative session past Thursday, in hopes of finding a funding solution for rail.

Ige said that he hasn’t been involved in any talks with legislative leadership to reach a deal.

Nonetheless, city leaders expressed glimmers of hope Wednesday that their counterparts at the state Capitol would somehow reach a last-minute compromise either today, as the regular session concludes, or during a special session in the coming weeks.

Without additional funding from the state, city leaders say they’d be forced to drastically raise property taxes to complete the 20-mile, 21-station project, and that the city’s bond rating could be downgraded.

In February, Honolulu Mayor Kirk Caldwell told the Senate Ways and Means Committee it would require a 14 percent across-the-board property tax increase to complete rail with city funds instead of with additional state general excise tax surcharge dollars.

“If the city receives no state support, financial support … I think that the fiscal impact on city taxpayers would be devastating,” City Council Chairman Ron Menor said Wednesday.

“I’m really hopeful that as cooler heads prevail and as legislators take the time to consider their respective positions, then at the end of the day they will be able to arrive at a consensus,” he added.

Sen. Jill Tokuda (D, Kailua- Kaneohe) said that the city’s talk of raising property taxes amounts to threats and scare tactics, and that its finance officials have not thoroughly combed the budget to find other potential funding sources. City budget officials, meanwhile, have sought to convince Tokuda and others that there’s simply no extra money buried in their budget to help pay for the rail project.

On Wednesday, City Council members advanced a measure that would lift the ban on using property tax dollars to pay for rail.

That city measure, Bill 42, aims to appease state legislative leaders who said that they would pass a GET surcharge extension only if the City Council removes its ban on using property taxes for rail.

The measure could prove important if the city doesn’t get any more support from the state on rail, however. The Council Budget Committee’s four members unanimously approved Bill 42.

Budget Chairman Joey Manahan described lifting the ban on using property taxes for rail as “involuntary at the moment.”

Caldwell also testified before the committee Wednesday, telling its members he was “concerned over what happens in the next two days over rail.”

The House’s amended version of SB 1183 would remove some $67 million from the city’s annual operations budget, he said. To fill that hole, city leaders might reconsider proposed fuel and vehicle weight tax increases, or else they could consider cutting employee benefits or raising property taxes, Caldwell added.

“It impacts people in our homes all around this island, and it’s not a place I want to go to,” Caldwell said of property tax increases in particular. “Three times running for mayor now … I said I did not want to do this.”

If state leaders wait until next year’s regular session for a rail-funding deal, the full 20-mile, 21-station project could be in jeopardy, Menor said.

The recovery plan that local rail officials submitted to the Federal Transit Administration earlier this week remains incomplete because it lacks a definitive funding source to close the project’s approximately $3 billion budget gap. Menor said the FTA is unlikely to wait another year for the city and state to solve that problem, and that could threaten the rail’s $1.5 billion federal funding.

At his news conference, however, Ige said he thinks “even the federal government would like to see the rail project finished.”

Caldwell said he has struggled to understand why so much of the rail debate has pitted city interests versus the state when they both represent the same constituents.

“The residents of Oahu are putting a lot of skin in the game, paying for this GET,” he told Council members who’ve all expressed support for extending the general excise tax surcharge. “It’s hard for me to understand why there’s such a discussion on the best way to fund rail.”

After Ige rebuffed extending the legislative session, the mayor declined to comment.

Letter from Hawaii mayors to Gov. David Ige by Honolulu Star-Advertiser on Scribd