A divided state Legislature closed out the turbulent 2017 session and headed home Thursday without approving any bill to provide more funding for rail, but Honolulu Mayor Kirk Caldwell said he plans to press lawmakers for a new rail funding agreement that could be ratified in a special session later this year.
The rail issue dominated the entire legislative session, but the House and Senate deadlocked over whether to extend the half-percent excise surcharge on Oahu for rail as the city requested, or try another approach to fund rail that involved an increase in the state’s hotel room tax.
Caldwell told reporters the city has enough money to keep the rail project moving until late summer or the end of this year, and, “I believe that we can live for another day.”
“What I’m hoping for is that after things cool down a bit, we’ll be working with the House and the Senate to see if we can’t come up with legislation that is acceptable to everyone,” he said.
In a rare closing-day leadership shake-up, House Speaker Joseph Souki resigned from his post at the request of his colleagues Thursday morning, and House lawmakers voted to elevate House Majority Leader Scott Saiki to the speaker’s job in a final floor session that Souki did not attend.
In the Senate, Ways and Means Committee Chairwoman Jill Tokuda made a tearful speech praising her staff and putting her colleagues on notice that she has further political plans.
Tokuda’s colleagues have agreed to remove her from the powerful Ways and Means post, which controls all tax and appropriations measures in the Senate. Tokuda has described that as a “power grab” related to the sometimes bitter rail debate.
“While my time as WAM chair has clearly ended and this sun has set, I am really excited about the opportunities on the horizon and where my sun will rise next,” Tokuda said in her floor speech Thursday. “This isn’t the end. It’s clearly just the beginning.”
Souki (D, Waihee-Waiehu-Wailuku) has served in the House since 1982, and had the political prowess to rise to the peak of the House leadership twice. He served as speaker from 1993 to 1999 and then retook the top post in 2013.
In a letter to his colleagues Thursday, Souki said he did not seek the speaker’s position in 2013: “I was asked to lead this body in order to bring all members’ voices to our deliberations. I was humbled to lead this body, and it has been an honor to serve the people of this state.”
Souki thanked the people of Hawaii and the members of the House in his resignation letter, “especially those who have stood with me through thick and thin.”
He said he regretted that lawmakers were unable to “do the work of the people” by reaching agreement this year on bills to provide billions of dollars in new funding for the Honolulu rail project, and on a bill to allow physicians to prescribe lethal medications to people with terminal illnesses.
Saiki told reporters during a news conference after the final floor session that House members asked Souki to resign at the close of session to allow time for a new slate of House leaders headed by Saiki to work in the interim before the Legislature’s next scheduled session in January.
The decision to remove Souki didn’t sit well with some lawmakers, including Rep. Marcus Oshiro and Rep. Sharon Har, who called the removal of Souki “unprecedented.”
“I think it is a sad time at this point, and to move forward with this resolution (naming Saiki as speaker) could have been done at some other appropriate time out of respect and deference for the speaker’s position,” said Har (D, Kapolei-Makakilo).
House members continued with the vote anyway, which was 39-9 in favor of naming Saiki as the new speaker, with Souki and two other lawmakers marked absent. One of those lawmakers, Republican Gene Ward, walked off the floor before the vote because he was unwilling to take sides in the Democrats’ reorganization, and House rules did not permit him to abstain.
As the House readied to adjourn for the year, Rep. Bob McDermott (R, Ewa Beach-Iroquois Point) rose on the House floor to criticize his colleagues for going home before coming up with a solution to the rail quagmire.
“I do not think we should adjourn ‘sine die’ until we deal with the issue of the train,” he said. “This is the largest public works project in the history of our state, and we are going to walk away today and leave it unsolved.”
But frustration and fatigue among other legislators was palpable as they blasted the Caldwell administration for soaring project costs and fuzzy budget numbers, and expressed bitterness at being asked to once again bail out the city.
The Legislature extended the excise tax surcharge in 2015 at Caldwell’s request to cover cost overruns in the rail project, but the city disclosed last year that the project is again over budget. The estimated price tag for the partially built rail project has increased from $5.26 billion in late 2014 to nearly $10 billion today, including financing costs.
That sent Caldwell back to the Legislature this year to seek another excise tax extension.
Sen. Laura Thielen (D, Hawaii Kai-Waimanalo-Kailua) warned in a speech on the Senate floor of the lost opportunities created by rail’s runaway costs. She said that money could go toward installing infrastructure to support affordable housing, building shelters with social services to help the chronically homeless, and installing air conditioning in sweltering classrooms.
“The mismanagement of this project, the lack of fiscal responsibility, we are at the point now where not only has it jeopardized the city, where the city can no longer be independently operated without having to rely on state tax revenues, we are now getting to the point where it is jeopardizing the state as well,” said Thielen.
Sen. Donna Mercado Kim also took to the floor to accuse the Caldwell administration of blaming state lawmakers if he raises city property taxes to cover the rail project.
“So let’s just get it on the record: We are not the ones that are causing the city to raise the property taxes,” said Kim. “They should have known these things are going to happen. They shouldn’t have fooled the public into thinking that any city project would have come in on budget and on time.”
Sen. Kalani English also chastised the mayor during a media briefing after the floor session, saying the city didn’t give the Legislature accurate figures on the rail project.
“Part of the reason it ended up in this situation, of course, is that the city never gave us good numbers, numbers that we could trust, numbers that we could work with,” he said. “It kept on changing. Even up until yesterday it was changing. So it is bad information in, bad information out.”
He said the debate over the rail issue had taken a “heavy toll” on lawmakers.
“People are very tired, are exhausted,” said English, adding that lawmakers need time to regroup before taking up the issue again.
But it’s not clear when that might be. Lawmakers could meet again in special session in the coming weeks or months if there are signs of a potential agreement. If not, the issue will wait until the next legislative session, which begins in January.
City Councilwoman Kymberly Marcos Pine asked Caldwell on Thursday to prepare a new city budget to impose the necessary budget cuts as well as fee and tax increases to pay for the 20-mile rail line from Kapolei to Ala Moana Center.
“The Legislature has stated their position to not to agree to fund rail and it is time for the Honolulu City Council and the mayor to make some very tough decisions, including the possibility of stopping the project completely,” Pine said in a written statement. “Rail as of today is dead. We simply cannot pay for a project that we do not have the funds to complete.”
Caldwell said he does not plan to declare the project dead just yet. “My preference is to put all my energy and focus on getting the House and Senate back together to pass a bill,” he said. “I’m not going to put my energy or focus on anything else until we know that’s no longer an option, and I believe it’s an option — the option, the preferred option.”
