Rail transit for Honolulu.

A rare open U.S. Senate seat.

A turning point for public schools.

The next year could be a pivotal one for Hawaii, with decisions ahead that could influence the state’s course for a generation.

Honolulu could pour concrete for a $5.27 billion rail transit project. Construction on a transit guideway for the elevated 20-mile line from Kapolei to Ala Moana could start in the next few months. But Honolulu still must continue to meet the Federal Transit Administration’s criteria for $1.55 billion in federal money necessary for rail. A federal lawsuit by rail critics who allege the environmental impact statement was flawed and incomplete could also halt the project.

U.S. Sen. Daniel Akaka’s retirement has created the first open U.S. Senate seat since 1976. U.S. Rep. Mazie Hirono and former congressman Ed Case are competing in the Democratic primary to replace Akaka, while former Gov. Linda Lingle is the leading Republican candidate. With the political balance of the Senate at stake, the Hawaii campaign will likely receive national attention and draw a record amount of political money.

The state’s public schools have to show progress at reform or could risk losing a $75 million federal Race to the Top grant.

A labor dispute with the teachers union has stalled work on a performance-based teacher evaluation system, teacher pay incentives and the equitable distribution of the most talented principals and teachers to help close the achievement gap among low-income students. While the loss of federal money would be substantial, the harsher blow could be the message sent to educators and parents about the underperforming state Department of Education.

RAIL

Honolulu’s $5.27 billion rail transit project hangs in the balance in 2012.

Supporters hope in the year ahead to brush aside the last major obstacles to Honolulu’s rail project to create unstoppable momentum for the train.

Opponents, meanwhile, will try to convince a federal judge this year that plans for the 20-mile elevated rail system are so inadequate and flawed that the project should be stopped cold.

In the political and psychological sense, the beginning of heavy construction on the rail line may be the most important development in 2012 because it can make the project seem inevitable.

In 2011, the city awarded a $487 million contract to build the first leg of the overhead rail line from East Kapolei to the Pearl Highlands Station, and also awarded a $372 million contract to build the Kamehameha Highway guideway from Pearl Highlands to Aloha Stadium.

The city also awarded another $195 million contract in 2011 to build a train maintenance and storage facility in Waipahu.

Design work is moving forward on each of those pieces of the system, and the city is seeking permission from the federal government to begin heavy construction on all of them. City officials confidently predict major construction on the East Kapolei line will begin in February or March.

Not surprisingly, rail opponents are expected to step up their legal assault as the city edges closer to major construction activities.

Prominent rail critics include former Gov. Ben Cayetano, who is considering a run for Honolulu mayor, former Hawaii Democratic Party Chairman Walter Heen and businessman Cliff Slater.

In their federal lawsuit to halt the project, they argue the city needs to reconsider basic issues such as the selection of steel-wheel-on-steel-rail technology and the route the rail line will follow through Hono•lulu.

Rail opponents say they likely will seek a preliminary injunction to stop work if the city moves into heavy construction, which means the court fight over rail may accelerate early in the year.

Another critical milestone is expected next fall, when the city hopes to win a commitment from the Federal Transit Administration for $1.55 billion in funding. All of the city’s financial projections assume the federal government will deliver that funding.

The city may reach one other milestone in 2012 that could make some taxpayers nervous. For the first time, the city plans to borrow money to help fund the rail project.

More than $342 million has already been spent on rail, but all of that money came from the federal government or from the half-percent excise tax dedicated to pay for rail.

Next year, city officials expect to begin borrowing to provide the necessary cash flow to keep the rail construction projects moving.

By Kevin Dayton

ELECTIONS

Going by state tradition, Democrats should be favored to keep U.S. Sen. Daniel Akaka’s seat. No Republican has represented Hawaii in the Senate since Hiram Fong left office in 1977.

Many national political analysts, however, have rated Hawaii a tossup, one of several campaigns that could determine whether Senate Democrats and independents keep their 53-to-47 majority over Republicans. Democrats have to defend 23 seats this year, while Republicans have to hold just 10 seats.

U.S. Rep. Mazie Hirono, a liberal, and former congressman Ed Case, a moderate, are expected to have a contentious August primary in which the issues are likely to be the economy, job creation and which Democrat is better suited to eventually succeed U.S. Sen. Daniel Inouye as Hawaii’s senior senator. Hirono has built an early fundraising lead and has secured establishment and labor endorsements, while Case has focused on grass-roots outreach at "talk story" events across the state.

Lingle, who faces attorney and former state lawmaker John Carroll in the primary, has portrayed herself as a moderate who would look for bipartisan solutions to end Washington gridlock. She has said she could raise a record $8 million to $10 million and will likely be able to conserve her financial resources until the November general election.

The campaign is a potential replay of the 2002 governor’s race, when Hirono narrowly defeated Case in the primary and Lingle beat Hirono in the general election to become the first Republican to capture Washington Place in 40 years.

National interest groups could take advantage of new freedoms regarding independent political spending and Hawaii’s relatively inexpensive statewide television market and invest millions in an attempt to influence the outcome.

The two wild cards in the campaign: Inouye and President Barack Obama. Inouye would lose his chairmanship of the powerful Senate Appropriations Committee and his title as Senate President Pro Tempore if Lingle helps Republicans take control of the Senate, a potent theme for Democrats. Another landslide by the Hawaii-born Obama — he won with 72 percent of the vote in 2008 — could doom Lingle’s chances of attracting enough independents and moderate Demo•crats to win.

In a potential rematch of the 2010 election, U.S. Rep. Colleen Hanabusa, D-Hawaii, and former congressman Charles Djou could clash in urban Hono•lulu’s 1st Congressional District.

Down the ballot, state House and Senate contenders are awaiting the results of lawsuits challenging the state’s new political boundaries after the census. Democrats in Hawaii County have asked the state Supreme Court to invalidate the new state district maps because they contend the state Reapportionment Commission included too many military personnel and students as permanent residents in the population base. If the lawsuits are successful, Hawaii County — which had significant population growth over the past decade — could gain a state Senate seat from Oahu, and many Senate and House districts could be redrawn.

By Derrick DePledge

PUBLIC SCHOOLS

For Hawaii’s school system, 2012 will either be about proving itself or failing to prove itself to a national education community doubtful the state will be able to achieve the reforms it promised.

If Hawaii can’t deliver, its $75 million federal Race to the Top grant could be lost.

Worse, the fallout from a public loss of confidence in Hawaii’s school system by native son President Barack Obama’s administration would be monumental, and no doubt cement long-held attitudes of some that Hawaii’s school system is broken.

Hawaii’s public education system was thrust into the spotlight in August 2010, when it was named as one of 10 grantees in a second round of awards under Race to the Top, a signature education initiative under the Obama administration.

Hawaii’s win was a big surprise to many onlookers, and some education pundits were skeptical of the state’s ability to pull off the big reforms it had promised in its Race application, especially so soon after the state had been in the news for instituting teacher furloughs that gave Hawaii schoolchildren the shortest instructional calendar in the nation.

To get the Race grant, Hawaii pledged to undergo a redesign of the state’s public school system, focusing its efforts on boosting student achievement, improving teacher effectiveness and turning around the lowest-performing schools.

The state ran into trouble in meeting grant targets early, in part because of staffing and procurement problems. But its biggest problems have centered on a labor dispute with teachers, which has stalled several major projects, including efforts to reach a union agreement on revamped evaluations for teachers.

Last month, in what many called a rare move, the U.S. Department of Education reprimanded Hawaii for "unsatisfactory performance"•in meeting its Race goals and put the state’s grant on "high-risk status."

Hawaii’s is the only Race grant to be deemed "high risk."

A U.S. DOE team will visit Hawaii later this month to see what progress the state has made since getting the grant — and determine whether Hawaii can make good on its Race promises.

"We are going to look for some pretty significant improvements pretty early in the new year," U.S. Secretary of Education Arne Duncan warned. "Hawaii is going to end up in a tough spot" if progress isn’t made.

State education officials are scrambling to prepare for the•visit, during which they’ll try to convince federal reviewers that a newfound momentum can make up for a slow start to Race efforts that resulted in delays of nearly every aspect of the state’s reform plans.

And though Race to the Top will likely dominate Hawaii’s education headlines in the new year, there are a host of other issues facing Hawaii’s school system in 2012. Look out for: progress on efforts to overhaul Hawaii’s charter school system; discussions about how to lengthen the school day; and steps taken to deter bullying.

By Mary Vorsino