Vote shows support is strong for rail bill

A package of state tax hikes to bail out the city’s beleaguered rail project appears poised to clear its last major hurdle with a full Senate vote today before moving over to the House.

On the Senate floor Tuesday, what would normally have been a procedural voice vote to position Senate Bill 4 for a final vote today was taken as a roll-call vote. The roll-call vote, at the request of Sen. Russell Ruderman (D, Puna), was 17-7 — a strong indication of today’s final Senate vote on the measure to rescue rail with a $2.4 billion funding deal.

Sen. Brian Taniguchi (D, Makiki-Tantalus-Manoa), who was absent for the vote, was traveling Tuesday, but his office said he would be back for today’s vote.

Sen. J. Kalani English (D, Molokai-­Lanai-East Maui), who was one of five senators to vote against the measure during Monday night’s initial vetting of the bill by the Ways and Means Committee, said afterward that he voted in favor Tuesday because it was a procedural vote.

House and Senate negotiators agreed to the bailout package last week. It involves raising the hotel room tax statewide by 1 percentage point to 10.25 percent for the next 13 years to raise $1.32 billion for rail. The measure also would extend the half-percent general excise tax surcharge on Oahu for another three years to raise $1.04 billion.

The bill is expected to be debated on the Senate floor today, the first opportunity for the full Senate to weigh in on the controversial measure.

The proposal has proved particularly unsettling for neighbor island lawmakers, who say many of their constituents oppose the idea of a statewide tax increase to pay for a Honolulu project.

“Every single individual I’ve spoken to from the Big Island so far wants me to vote no and feels this vote is unfair,” Sen. Josh Green (D, Kona-Kau) said after voting no Tuesday and indicating he would do so again today.

“When you take a large program and you commit $10 billion to it over time, it makes it very difficult to focus on other priorities,” such as what Green characterized as the state’s billion-­dollar hospital- and education-related challenges, among other pressing issues, he said.

The partially built rail project is significantly over budget, with estimated costs swelling from $5.26 billion in late 2014 to nearly $10 billion, including financing costs. The Federal Transit Administration has given the city a Sept. 15 deadline to show how it plans to raise the money to cover the budget gap. The FTA has already extended that deadline several times in the past 13 months.

In the past week Honolulu Mayor Kirk Caldwell has publicly disagreed with members of Hawaii’s federal delegation and some of his own rail allies who say the Legislature’s funding package will be sufficient, prompting legislative leaders to try to assure their members that the plan is solid.

Caldwell and City Council leaders contend the proposal needs at least an additional $548 million to pass the FTA’s financial “stress test.” U.S. Rep. Colleen Hanabusa, a former chairwoman of rail’s oversight board, counters that the FTA won’t require such stress-test dollars upfront.

Sen. Laura Thielen, who opposes rail and has previously criticized Caldwell’s handling of the project, said the mayor’s recent warnings mean the legislative deal is insufficient and that cost increases would be inevitable.

“When the price tag goes up — and this is a ‘when’ because we don’t have the bids in yet for the most expensive portion of rail — the city will be back,” Thielen (D, Hawaii Kai-Waimanalo-­Kailua) said after voting against advancing SB 4 on Tuesday. “Perhaps not this mayor, but the next mayor will be coming back and asking for more money and blaming the current mayor for the problem.”

“The City and County of Honolulu does not have the tax base that can pay for this project,” she added.

During the regular legislative session this spring, lawmakers deadlocked on how to generate the billions of dollars in additional funding needed to complete the rail project. However, after months of tense negotiations that upended leadership in the Senate, the two chambers announced a tentative deal that they said would complete the 20-mile, 21-station project to Ala Moana Center based on the city’s own numbers, save more than $208 million in interest payments and provide state oversight to help keep costs in check.

If approved by the Senate, SB 4 will move over to the House of Representatives, where support is said to be strong. The bill already has been scheduled for an initial joint hearing before the House Finance and Transportation committees today at 1:30 p.m. in the Capitol auditorium.

If the House doesn’t make any major changes, the bill would go to Gov. David Ige for final approval. When details of the bill emerged last week, Ige said he was “elated” that legislators had come to an agreement.