How to boost funding for Oahu’s over-budget rail transit system — the largest public works project in state history — looms large as the Legislature prepares to convene later this month.
One fact that should be clear from the outset: Whether to extend Oahu’s half-percent surcharge on the general excise tax as a funding source is a political question that must be answered by elected representatives, who should make their views clear to taxpayers and the voting public through open discussion.
That is the only way to ensure that these key decisionmakers are accountable moving forward.
Taxation with representation is a founding principle of American democracy, and that ideal is at stake here.
The Honolulu Authority for Rapid Transportation, the semiautonomous agency that oversees the project, was invested with substantial power when it was created via a voter-approved amendment to the City Charter in 2010. However, that authority does not include the ability to tax — or extending an existing tax past its original expiration date.
Now that the projected cost of the 20-mile rail transit system from East Kapolei to Ala Moana Center has ballooned — potentially costing $700 million more than the $5.2 billion first envisioned — Mayor Kirk Caldwell seems too willing to hand off to a HART appointee the lead role in persuading the City Council and state Legislature to support extending the GET surcharge.
The mayor, speaking broadly about his support for rail after the biennial City Council inauguration at Honolulu Hale, observed that most major mass transit systems have a dedicated funding source that pays for construction, operations and maintenance. But he also said that he would leave it to HART Chief Executive Officer Daniel Grabauskas to lead the charge to extend the surcharge, which raises the regressive tax to 4.5 percent on Oahu, past its original sunset date of 2022.
That’s a disappointing stance from a mayor who campaigned on the promise to "build rail better," and was elected in 2012 in part due to his support for rail transit and his pledges to "ensure better station design, less visual impact, tighter financial controls, and paying attention to community concerns."
In other words, Caldwell promised a nervous public that he would make sure rail was built right. It’s time for him to make good on his promise — not hand it off to someone else.
One of the biggest community concerns these days is how to pay for rail, and the mayor must be front-and-center leading this discussion. Grabauskas unquestionably adds important information and insight, but as an appointee not directly accountable to the voting public, he should not dictate the source of needed funds, especially when that source will further burden taxpayers.
Likewise, as much as HART officials would like to spin the conversation forward, past the budget woes to extending the GET surcharge as a way to finance a subsequent rail spur from Ala Moana to the University of Hawaii, it’s important to focus on the here and now. The City Council members and state lawmakers who have vowed heightened scrutiny should not look so far ahead that they misjudge the escalating cost of the phase already under construction.
The GET surcharge was promoted as a prime source of rail funding because one-third of the total take is paid by tourists and other visitors, lessening the burden on Oahu taxpayers. (Combined with funding from the federal government, about half the total cost of the rail project falls on local residents.) The GET’s appeal in that regard is undeniable, now and in the future, but so are its negative cascading effects on consumers and businesses, especially small enterprises struggling to stay afloat.
As the pros and cons of extending it are hashed out over the coming weeks and months, we expect our elected officials, especially the mayor, to be leading the debate.