Here’s the positive element of this week’s rail conference at the state Capitol: More of it’s been out in the open. That’s a plus for transparency in conference committee discussions that are usually behind closed doors.
Now, if only the fog would clear.
At issue is for how much longer the state should authorize the general excise tax surcharge that underwrites the project, along with the $1.55 billion subsidy from the Federal Transit Administration.
Unfortunately, the people driving this process — principally those representing the city, the Honolulu Authority for Rapid Transportation and Mayor Kirk Caldwell — also seem to be stumbling in the dark.
Today they’re the ones who must make the affirmative case for finishing this critical project. And to accomplish that, they must arm themselves with the numbers outlining how much that’s expected to take, and answer lawmakers’ questions.
As for the legislators, it’s decision time. Tonight is the deadline to deck bills for next week’s final vote. Sunday is the deadline for the city to submit its financial recovery plan — the blueprint for how HART plans to make up for a funding shortfall, estimated at up to $3 billion. Without that plan, the FTA could withhold the remainder of the federal subsidy, leaving the city to close an additional gap.
If lawmakers believe this project should be finished as intended, linking East Kapolei with Ala Moana Center, they need to authorize enough financing to demonstrate to the FTA the local commitment is there, plain and simple.
Based on the information presented publicly, the House proposal to extend the GET for only two years is insufficient as the basis for moving forward with the project. There is, according to the city, cash needs at the front end of the construction period that would not leave enough money for financing payments for the next building phase of the project. Cutting things too close would not be wise, given the looming federal deadline.
The question is, how much more would it take? That essential query is impossible to answer with pinpoint accuracy because there are so many variables: the bid price for the next set of contracts, interest rates in the coming years of construction, the amount of tax revenues the city can expect from the GET.
But surely the city can provide a stronger rationale for a longer extension than it’s offered. After Wednesday’s legislative conference committee, Krishniah Murthy, the interim executive director of HART, expressed uncertainty over how much a competing proposal, a 10-year extension of the tax surcharge, would raise.
But he also said the revenues would fall short of needs by $600 million to $800 million. What’s the basis for that assertion, if the tax yield is unknown? He needs to lay out the best estimates he has to persuade holdout legislators.
For their part, lawmakers also may have lost their way in all of this. Sen. Lorraine Inouye, who chairs the transportation committee, favors the 10-year extension, but her draft of the bill would siphon off 19 percent for state transportation projects and 1 percent as a tax-collection service charge. That’s twice the 10 percent being taken now — the controversial “skim” the state has been taking from the start.
Whether or not that is simply a sweetener to gain votes for her proposal is immaterial. The tax surcharge was authorized for the rail project; taxpayers shouldn’t pay it for an extended period to finance some other still-unspecified transportation projects. That’s just wrong.
What’s being lost on the political battlefield is the argument for the benefits a functional rail system could bring to transportation and mobility. There’s also its effect in jumpstarting development for housing and other needs in the urban core. The city has to make that case, plainly and in these next few hours.
Whether or not Oahu gets those benefits hangs in the balance.