Ige signs bill giving state added control over rail

With the stroke of a pen, Honolulu’s rail line no longer appears stalled at Middle Street.

Gov. David Ige signed into law Tuesday Senate Bill 4, an estimated $2.4 billion bailout package that island leaders hope will finally complete the transit project to Ala Moana Center, following three years of steep cost increases that have left its outcome uncertain.

Ige said that his staff reviewed the bill over the Labor Day weekend and found “no fatal flaws” that would leave it vulnerable to legal challenges.

“I believe that this measure allows this most important project for the City and County of Honolulu to move forward in a way that will allow it to be completed,” he added during Tuesday’s signing ceremony. Attorney General Doug Chin and other Cabinet members looked on as Ige’s pen capped a bruising, months-long effort by state leaders to reach their latest rail-funding deal.

State legislators, including House Finance Chairwoman Sylvia Luke, also joined the governor Tuesday. Majorities in both legislative chambers passed SB 4 during last week’s special session and sent the measure to Ige on Friday.

It now remains to be seen whether the Federal Transit Administration will accept the deal and eventually release the $744 million or so left in its $1.55 billion funding agreement. Honolulu Authority for Rapid Transportation officials say they’re already working to deliver a financial report based on SB 4 by the FTA’s latest deadline, Sept. 15.

Ige’s SB 4 signing also coincided with new HART Executive Director Andrew Robbins’ first day on the job. Ige said he and Robbins met last month.

“We had a very good conversation,” Ige said. “I did share with him the concern shared by the Legislature about accountability, transparency — about the willingness of the HART board to look at alternatives in a real way, rather than just token kind-of examination.”

Ige’s office scheduled Tuesday’s signing ahead of today’s Honolulu City Council meeting, in which a majority is expected to approve Bill 45 and extend rail’s general excise tax surcharge another three years to 2030 now that it’s authorized by the state.

State budget officials estimate the GET surcharge extension will provide at least another $1.05 billion for rail. SB 4 also raises the state’s transient accommodations tax by a percentage point, to 10.25 percent, for the next 13 years. Officials expect that increase, which has met stiff resistance from many on the neighbor islands, will provide another $1.33 billion.

The bill gives the state increased oversight over the county’s effort to build rail — the largest public works project in state history. It requires the city to pay rail project vendors upfront and then submit requests to the state for reimbursements from the excise surcharge and hotel room tax revenue.

It also tasks the state auditor with auditing the Honolulu Authority for Rapid Transportation, including “an examination of the financial records and an analysis of the financial management of (HART),” and allows for the state House and Senate to appoint two nonvoting members to the HART board.

At Tuesday’s signing ceremony Ige acknowledged that the measure’s statewide hotel room tax increase irked many on the neighbor islands, but he said lawmakers would work toward a fairer apportionment of that tax across the counties.

“What I heard loud and clear … is a feeling that the counties need more support, more fiscal support — I recognize that,” Ige said after signing SB 4, which boosts the counties’ current TAT share to $103 million from $93 million. “What I’m committed to is having the conversation about roles and responsibilities” of the counties versus the state, he added.

Absent from the signing ceremony was one of the rail project’s most ardent supporters: Honolulu Mayor Kirk Caldwell.

Caldwell clashed both publicly and in private with legislators and members of Hawaii’s federal delegation during last week’s special session. Despite assurances by U.S. Rep. Colleen Hana­busa to legislators that their deal is sound, the mayor has expressed misgivings about whether the FTA will deem the state’s spending package sufficient.

He has vowed to return to the Legislature for more funding if it isn’t.

Caldwell has further questioned whether parts of SB 4 are legal, particularly flagging state officials’ oversight of invoices because the state is not part of the city’s full-funding grant agreement with the FTA.

However, on Tuesday, Chin said “the Legislature really did a good job establishing a record that explained what was their rationale for why they were asking for what they wanted,” making the bill legally defensible.

A statement released by Caldwell on Tuesday struck a more conciliatory tone, saying said that Ige’s signing shows the governor’s “commitment and leadership in completing the rail project as promised to the people of Oahu, and is proof of the hard work done by members of the state Senate and House during the special legislative session.”

Caldwell’s administration is now working to implement “all of the mandates of the rail funding bill, in particular more state oversight of rail construction and the timely transfer of tax revenues to the city,” the mayor’s statement added.