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Today’s class is about political economics, as in don’t ask for something you can’t pay for.
As a former state legislator, House Democratic leader, Honolulu managing director and twice-elected mayor of Honolulu, you would think that Kirk Caldwell would ace the class.
Instead, it appears that Caldwell will be repeating it.
Simply put, you cannot spend every free moment haunting the halls of the state Capitol begging money for city projects without there being dues to pay.
Thanks to a special legislative session this summer, Caldwell got the the money for his way-overbudget rail project.
The action came after Caldwell said he actually needed even more money to finish the project — but with combined pushback from legislative leaders, including Finance Committee Chairwoman Sylvia Luke and House Speaker Scott Saiki plus a lot of stern-faced head shaking from U.S. Rep. Colleen Hanabusa, Caldwell got more money by having the state raise the hotel room tax.
The payback is that now the Legislature has become an uninvited financial consultant to the city.
The pushback was when Caldwell came up with elaborate new plans to redo the Blaisdell Center complex at a construction cost price of $534 million with an extra $106.8 million for development and construction contingencies and $51.2 million for the anticipated increases in material cost.
The real cost of the revamped entertainment center would be $692 million, which is an awful lot to pay just so you can get lots of parking and a fancy latte before you take the kids to see Kristi Yamaguchi ice skating.
“Oahu taxpayers cannot take the brunt of paying for rail construction, rail operations and this project. Once the City Administration committed itself to the rail project, it cannot further burden our future generations with additional debt,” Speaker Saiki said in a letter to Caldwell. The mayor shot back that Saiki was looking at two different pots of money and there was plenty in both.
Not so, says Rep. Luke, who in an interview last week added to Saiki’s concerns.
The catch is that the Legislature added into the city rail bailout bill $1 million for a special state audit of Caldwell’s rail project because it is years overdue and billions over budget.
Luke just concluded a series of meetings with the state Auditor’s Office to review what the Legislature wants to see studied.
“I said start off by talking to just everyone who you can think of that knows anything about the project. You will get a huge amount of information,” Luke said.
The bailout bill also requires the city to send the rail bills to the state to be paid, instead of the city just getting state money and then paying the bills. Luke has been meeting with state budget and tax and legal officials to ask that they require the city to “certify under pain of perjury that the bills are valid and have not already been paid.”
“I want the threat of criminal violation attached,” Luke said.
As for rebuilding the Blaisdell, it is nice and that may be needed — but rail is going to need an extra $100-$120 million a year for operation and maintenance and repair once the trains start running and that is not in the city’s operating budget, Luke said. “No matter what pot you say the money is in, it all comes from the taxpayer.”
Along with the bailout, the city and the rail project just got an entire Legislature full of new watchdogs to help count the municipal beans.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.
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