The City Council made a deal three years ago with taxpayers that the cost of the $5.5 billion rail line from Kapolei to Ala Moana would not be paid by the city’s traditional sources—but the city’s transportation director seems to be wavering. The real cost of the project has been questioned from the beginning and reassurance is needed that the special excise tax surcharge and federal money will pay the bill.
Opponents of the rail line have complained from the start that the city had underestimated the cost. While revenue from the tax surcharge has been less that expected because of the staggering economy, the contract bids for design and construction of the transit system also have been lower than initially presumed for the same reason.
Mayor Mufi Hannemann said last October that the low bids indicated "that we have been conservative in our estimate and our financial plan is very sound." Gov. Linda Lingle now is evaluating that plan before deciding whether to allow the project to go forward, and she should conduct her review in an expeditious way that does not itself add to the cost.
The city ordinance approved by the Council three years ago provided that the project’s capital cost and interest "shall be paid entirely from general excise tax and use tax surcharge revenues, interest earned on the revenues, and any federal, state or private revenues."
City Councilman Ikaika Anderson said that any use of general fund money, mainly from property taxes or diversion of TheBus money, would violate the ordinance. That seems to be the case.
However, when Anderson put the question to Wayne Yoshioka, the city transportation director, Yoshioka answered, "Is it even a consideration? Sure, everything’s on the table. But I think when we have to look at this issue we’re going to really have to look at it comprehensively. It’s not really a policy we’re following right now." He called dipping into the city’s general fund "highly unlikely."
That is not enough. From the outset, taxpayers were assured that the excise tax surcharge combined with federal grants would be enough to design and build the elevated rail line. The excise extra was figured to collect $3.7 billion and federal assistance would total $1.55 billion plus $300 million in federal money diverted from TheBus and Handi-Van.
Anderson correctly points out that diverting money from the general fund to pay for building the transit would be in violation of at least the spirit of the ordinance if not the rule of law.
It means that the city should find ways to stay within limits without departing from the plan for an elevated steel-on-steel system, the kind that voters indicated their approval for in a charter amendment in 2008.
Taxpayers want to believe the city’s rail proponents when they say that the project’s financial plan "is very sound." Hold to it then, and build rail on budget using the promised revenue stream. Hand-dipping into unintended public coffers would be a broken promise.