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While Gov. David Ige is busy declaring new state emergencies, it is too bad that he hasn’t leaned over to the county level, declaring the city’s rail project a disaster in need of outside help.
When then-Honolulu Mayor Mufi Hannemann pushed forward the state-city plan to build a 20-mile, pillar-supported rail line after his first mayoral election, no one imagined that in 2021, the project would still be staring at a decade more of work.
Hannemann took the “Mayor-elect” off his title in 2005, and since then, the project has grown from an estimated cost of $5 billion to a current projected $12.499 billion. Even that estimate comes with a caveat that the cost could rise another $3.5 billion with a somewhat open-ended competition date.
The City Council is now back into the debate because it is figuring out how to pay for the rail line.
Everyone in Honolulu pays 0.25% more in general excise taxes, with the extra money going to help pay for rail. The cost of buying a loaf of bread in Hilo includes 4.5% in excise taxes; in Honolulu it is 4.75%. For years, critics have warned that it is not enough money. So a new source of money — tourists — are now considered the easiest wallet to tap.
The City Council is halfway through the process of establishing a new Oahu 3% hotel room tax, with some unspecified portion of it going to rail.
Does the train line go to Waikiki? No, but it will stop at the Honolulu airport, and that is apparently good enough to hit up the tourist industry for a piece of the rail action.
If it is too cynical a description of rail financing to call it “juggling the books,” it certainly is not incorrect to say that changing the source of funding from just city money, plus a state excise tax increase, to all that PLUS part of a new hotel room tax is a piece of municipal fiscal wonderment.
The thing about budgets is that if you spend more money than you make, we call that a deficit.
If you can’t pay the money and you must borrow it, we call that debt.
Right now, the city is still saying it will pay the deficit and not go into debt.
The hope is that this will be the last time the city needs to dream up a new taxing scheme to pay for the train.
There’s a lot of hope going on with the city budget, because that new hotel room tax is also supposed to handle the more than $45 million in budget cuts taken when the state took away the county subsidies in the last legislative session.
The captain of the Titanic also hoped he had enough lifeboats for everyone — but wishes don’t keep you dry or your budget balanced.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.
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