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The city needs to make sure Honolulu is sending the right message about rail financing in the next critical months before federal officials make the final call on Uncle Sam’s share for the project.
And that message should not be: We might need to siphon off money from a popular bus service to make this new project work.
Fortunately, the authorities planning the $5.3 billion rail project have backed away from that message somewhat in its latest financial plan, though not far enough. City officials insist that there’s only a "very low probability" that bus funds would ever be needed. But it has found alternatives to even this fallback option and should promote these as the preferred choice.
The issue raised eyebrows among top Federal Transit Administration officials when they reviewed the original financial plan, first issued about two years ago. In February, FTA Administrator Peter Rogoff called for a more robust plan, underscoring his doubts about a city proposal to tap $300 million in federal funds intended for bus system planning.
"The issue of whether they’ll use federal bus funding, when we see proposals like that we evaluate whether maintaining the very important bus service is viable into the future," Rogoff said at the time.
The money in question: the FTA Section 5307 Formula Funds. At first the city listed it as available to the rail project between fiscal years 2011 and 2019. In the latest plan, presented last week to the City Council, that amount has been cut to $244 million, becoming available only between 2013 and 2019. And the new financial blueprint now includes one scenario that does not require bus funds at all.
That option would replace the bus funds by issuing more general obligation bonds backed by revenues from the general excise tax surcharge that is primarily funding the rail. This option would also require extending the surcharge by nine months, through the end of September 2023. Alternatively, according to the updated plan, rail cars could be acquired through a leasing arrangement, to reduce reliance on the 5307 funding.
In a letter to FACE-Hawaii, a nonprofit group working to counter poverty, city Transportation Director Wayne Yoshioka called the likelihood that bus funds would be used a "very low probability," only proposed because the city had to consider a "worst-case scenario." Let’s hope that is the case.
It’s especially important now to back away from diverting bus funding, as a result of two developments. One is the mounting public unease with the financing prospects, as evidenced at City Council hearings and in recent opinion polling conducted by the Star-Advertiser and Hawaii News Now.
In the poll, more than two-thirds of 443 surveyed said they strongly agreed with the statement, "The rail project will end up costing a lot more than is currently estimated." Meanwhile, confidence in the benefits of rail outweighing those costs seems to be flagging. For example: Only 16 percent strongly agreed that the jobs created by rail would boost the economy to make the project worth the expense.
Secondly, a two-year study conducted by the Brookings Institution think tank calculated that 97 percent of Honolulu’s working-age residents are within three-quarters of a mile from a transit stop — in this case, a bus stop. This makes the city No. 1 in the nation for workers’ access to a transit system. It’s only the latest statistic that sharpens Hono-lulu’s image as a high-ridership transit city.
This would be the wrong time to tell the feds, and the taxpaying public already nervous about this mammoth public-works commitment, that Honolulu has any intent of weakening its existing transportation asset. The aim is to get a full pledge of help from the FTA, and ill-considered financing proposals won’t help the city achieve that goal.
