State Department of Transportation officials plan to defer hundreds of millions of dollars in long-awaited, major highway construction projects across the islands that were supposed to relieve traffic congestion so that they can focus more highway funding on maintaining existing roads.

Given current funding levels, the state is on the verge of shutting down its highway “Capacity Program” to expand the network of state roadways to accommodate more traffic, said Edwin Sniffen, DOT Highways Division deputy director. “The biggest thing is, I cannot justify adding new roads to the system if I cannot maintain the roads that we already have,” he said. “It’s not only impractical … but it’s also against the national mandates now.”

Unhappy lawmakers are questioning the seemingly abrupt decision to defer major construction projects that are important to their districts, and one said the deferrals are part of a strategy by Gov. David Ige’s administration to “blackmail” the Legislature into approving a package of gasoline and other tax or fee increases.

Earlier this year the Ige administration proposed increases in the state’s gas tax, registration fee and weight tax, citing the need for more money to fund the department’s highway Capacity Program. Those proposed tax increases would have boosted the amount of annual funding for highways projects from about $300 million a year to $370 million, but lawmakers rejected a broad-based, election-year tax increase.

Ige said he will again ask lawmakers to approve the increases next year.

In the meantime, Sniffen said, the state is focusing its efforts and most of its funding on maintaining the existing highway system. Much of the state highway network is 50 to 60 years old, and Sniffen said state officials concluded the amount spent on maintenance in years past has been inadequate.

Sniffen said the state must commit about 90 percent of the $300 million a year in available funding to system preservation and safety improvements. That leaves only 10 percent, or about $30 million, for projects that would increase capacity.

“Really the Capacity Program, when we go to this 90-10 model, is no longer existent,” Sniffen said. “In the short term, it’s going to be 90-10. I’m going to be pushing a lot more money into the system preservation and safety side.”

Last year Sniffen gave another reason that the state was shifting money away from major new construction projects in favor of relatively simple highway maintenance initiatives such as repaving and safety improvements. He said at the time that executing less complex maintenance projects would allow the state to spend federal highway funds more rapidly.

The Federal Highways Administration has strongly criticized the state for allowing a large pool of unspent federal dollars to build up. Federal officials warned the state in 2014 that unless Hawaii spent the money more quickly, it could lose federal highway funds.

The Ige administration says it has made great progress since then in spending those funds on highway projects. The state reduced the pool of unspent federal funds from a high of $940 million six years ago to less than $540 million at the end of May, Sniffen said.

However, Sniffen now says the state doesn’t have enough money to execute many of the large new construction projects that were supposed to increase the capacity of the highway system and ease traffic congestion.

Demands deferred

Communities around the state have for years been demanding many of the projects that are now being deferred.

For example, a summary of the Capacity Program plan provided by Sniffen shows that current funding levels won’t allow the state to complete construction of the long-awaited improvements to enlarge Highway 130 between Pahoa and Keaau on the Big Island for the next 20 years.

That stretch of road is regularly the scene of long traffic jams during morning and evening commuting hours, and the state has been telling Puna residents for years that it plans to widen that two-lane highway to Pahoa to four lanes. The final environmental assessment for that $160 million widening project was finished in 2011, but the project is now listed with dozens of others that would be deferred unless the state finds more money for new construction.

The possibility of a delay in that Puna project came as a surprise to state Sen. Russell Ruderman, who represents the neighborhoods that are served by Highway 130. About 30,000 people are relying on that roadway, which bottlenecks to one lane in each direction, he said.

“I know that there’s traffic problems throughout the state, but I think in Puna it’s more of a crisis than a problem, and it’s also a disaster waiting to happen,” Ruderman said. “I think we need a functional highway in and out of Puna as a basic safety and disaster preparedness consideration.”

Ruderman also questioned how the state DOT could abruptly go from having a surplus of federal funds that were being spent too slowly to a new predicament in which projects must be deferred because the department has too little money to fund them.

“I don’t understand how they could go from too much money on their hands to needing a gas tax increase, with nothing in between,” Ruderman said.

‘This is blackmail’

Rep. Joy San Buenaventura, who also represents Puna residents, was more blunt.

“I think that this is blackmail,” she said. “This is extortion, I don’t see it any other way, because it’s been on the budget, they’ve never talked about this huge disparity before until now, and I think this is payback.”

San Buenaventura said she discussed the gasoline and other tax increases for highways with transportation officials who wanted her to vote for them during the last legislative session.

“The implication was my priorities for state highway funds, which is basically Highway 130, will be be deferred unless I voted with them,” she said. “They didn’t actually say it, but that was the implication.”

Sniffen acknowledged the acute need for the Puna project, saying that “if I fund anything on the Big Island, it’s going to be that, it’s going to be Highway 130.”

“Because of the growth in the area and because of the accident history or the safety history in the area, that’s a project that’s easy to justify moving forward,” he said.

In response to follow-up questions, the department issued a written statement explaining that “discussions with state and county officials indicate that the top priority in Hawaii County will be the Highway 130 improvements project. The project will be delivered and phased as funding allows. We are not able to provide definitive dates as we are still reprioritizing the capacity program and determining available funding …. The exact phasing will be finalized at a later date.”

In response to the suggestion that deferring major highway construction projects amounts to political “blackmail,” the department said in its written statement that DOT staff met with lawmakers this spring to explain what would happen if the gas and other tax or fee increases failed. That discussion included the possibility of project deferments, according to the statement.

“Regrettably the bill still did not pass,” the department statement said. “HDOT’s focus has shifted more toward system preservation projects which can be completed faster and with less money than capacity projects.”

Projects in limbo

Sniffen said he was not ready yet to describe in detail which capacity projects will be delayed on Oahu, “but really, from my perspective, I’m not going to move forward on any capacity projects until I fund the system preservation and safety side sufficiently,” he said.

One Oahu capacity project that will be affected is the eastbound H-1 widening from Waiawa to Halawa, which is in the planning stages, he said.

“It’s going to assist everybody that lives on the west side, but I can’t do it yet because it’s (money) that I cannot commit to right now,” Sniffen said. “If we can get a continuing addition to our funding, then I can see that we can fund something like that.”

Likewise, Sniffen said he cannot move forward with the Kahekili widening project from two lanes to four lanes from Haiku to Ahuimanu for $66 million. The draft environmental assessment for that project is due out this summer, he said.

On Maui, Phase 1B2 of the Lahaina Bypass will proceed, but the next phase of the same project would be delayed by 20 years or more, according to the summary of the DOT capacity program provided by Sniffen. That $60 million “Lahaina Bypass 1c” project would connect up Lahaina Bypass to Kaanapali Connector.

“I cannot see that phase moving forward unless we have a dedicated funding source coming in to replace the capacity funding that I’m taking out right now,” Sniffen said.

None of the major new construction projects planned for Kauai would be built in the next two decades, according to the summary. Also thrown into limbo is the Paia Bypass project on Maui, which is expected to cost $280 million to $300 million.

Sniffen said he has already broken the news about similar delays in projects to the Kauai community about the decision to delay the Kapaa Bypass Road, and to the South Kohala Traffic Safety Committee of the Waimea Community Association about the Kawaihae Bypass, which is also being deferred.

Sniffen repeatedly stressed that the projects are not dead, but “are just projects that we cannot move forward at this time because we cannot see funding available to fund these projects in the next 20 years.”

Rationale questioned

House Finance Chairwoman Sylvia Luke is skeptical of the reasons given for the project deferrals. She said lawmakers provided the DOT with an extra infusion of $37 million this year as a temporary substitute for a gas tax increase, which means the department can’t blame the failure of the tax increase for delays in capacity projects.

“It is kind of troubling and puzzling that DOT is now pointing to the failure of the tax bill … to delay the projects,” she said. “That cannot be right. There has to be another reason.”

When the administration realized the tax increases were failing, they should have planned accordingly, Luke said.

Ige asked lawmakers this year to raise the state’s gasoline tax from the current rate of 16 cents a gallon to 19 cents a gallon. He also asked them to increase the state’s vehicle registration fees and weight taxes, and the administration estimated that altogether that package of increases would cost a typical motorist an extra $83 a year. The Ige proposals would have also doubled the tax on diesel oil to 2 cents from 1 cent a gallon, and increased the tax on aviation fuel to 2 cents from 1 cent a gallon.

The counties each impose their own separate county gasoline taxes on top of the state’s current 16 cents a gallon. The county taxes range from 8.8 cents a gallon on the Big Island to a new rate of 23 cents a gallon on Maui that took effect July 1. Those county tax rates would not be affected by the Ige administration proposal for gas tax, weight tax and registration fee increases.

The proposed gasoline tax increase would be the first for the state since 2007, but the American Petroleum Institute calculated that Hawaii’s combined state and county gasoline taxes were already the fourth-highest in the nation as of Jan. 1.

CHANGING LANES

The state Department of Transportation says it must shift as much as 90 percent of currently available funding to maintenance and safety improvements for existing Hawaii roadways. Unless the state can find more money through tax or fee increases or some other means, hundreds of millions of dollars in planned projects to ease congestion and increase capacity will have to be delayed for the next 20 years or more. The department has provided examples of major projects on the books, funded and unfunded.

CAPACITY PROGRAM AND FUNDING ASSUMPTIONS

Earlier this year state Department of Transportation provided lawmakers with a chart entitled “Capacity Program at Various Funding Levels (20yr).” The chart lists capacity projects across the state, and organizes them according to which projects can be executed in the next 20 years using various funding assumptions.

Traditionally, the state has spent 65 percent of its available funding on maintenance and safety improvements, and 35 percent of available funding on “Capacity” projects that reduce congestion and allow state roadways to handle additional traffic. At those 65-35 funding levels, each of the Capacity projects above the thick black line on the chart would be funded in the next 20 years, and those below the black line would not be funded during the next two decades.

Last year, state officials said the department would adjust that traditional funding split to devote 80 percent of available funding to maintenance and safety projects, and 20 percent to Capacity projects to reduce congestion. At those 80-20 funding levels, all projects above the thick blue line would be executed in the next 20 years, and those below the line would not be funded in the next 20 years.

The department now says it must further increase the amount it spends on maintenance and safety improvements, and plans to devote 90 percent of available funding to maintenance and safety projects. That would leave just 10 percent for “Capacity” projects. Using that 90-10 split, all projects above the thick red line would be funded in the next 20 years, and those below the red line would not be funded in the next two decades. Kauai’s portion of the chart has no red line because the 90-10 split would not allow for any of its capacity projects to be funded during the next 20 years.

Transportation officials say that unless lawmakers approve Gov. David Ige’s proposed increases in state gasoline and weight taxes and an increase in the state registration fee, the department will have to implement the 90-10 funding split.

Transportation officials are still reviewing Capacity Projects for Oahu to determine how they would be affected by the 90-10 split.