Fluctuations in rail revenues continue
CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM
Rail construction at Farrington Highway and Awalau Street creates traffic in Waipahu.
The state tax haul for Honolulu rail continues to see-saw.
Recently, general excise tax surcharge collections for the project have fallen well short of official projections in one quarter only to rebound and beat them in the next.
Rail officials reported today that the project received $60.9 million in general excise tax surcharge collections for the first quarter of 2016, exceeding forecasts in rail’s outdated 2012 financial plan by $2.2. million.
The previous quarter, Honolulu Authority for Rapid Transportation reported that the transit project received $51.2 million to help fund construction, which was $8.4 million less than rail officials had forecast for October through December 2015.
The rail project received $8.3 million more than forecast for the quarter ending September 2015.
It received $8.3 million less than forecast in the quarter before that.
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HART officials said today that they still don’t know the reason for all the recent quarterly swings.
Overall, the project’s GET collections are tracking about $36 million less than projected to this point, representing a 1.1 percent shortfall, according to HART.
In 2014, rail officials predicted that they would fall short by about $100 million in surcharge funding by the time the tax expired in 2022. It was part of the budget shortfall they presented to the public, and it helped spur state and local leaders to approve a five-year extension of the surcharge.
Rail’s GET surcharge for Oahu is now set to expire in 2027, and project officials estimate it will generate an additional $1.5 billion.
Rail has taken in some $1.69 billion from the surcharge since collections started in 2007, according to HART officials.
As costs continue to climb, it remains to be seen whether the tax extension will generate enough funding to complete the largest public works project in state history.
34 responses to “Fluctuations in rail revenues continue”
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Rail is a bottomless pit for tax dollars. There is no accountability and no apparent plan for cost containment. If the rail runs out of money, they may no choice but to stop at Middle Street. That’s why it was a boneheaded move not to start from the final destination (UH Manoa) and build towards the west.
STOPRAILNOW – and fire ukuleleblue and wiliki
THEY WILL NEVER EVER RUN OUT OF MONEY…UNLESS THE POPULATION EVACUATES OUT OF THE STATE.
We are in a very strong economy now so we can expect to see more general excise tax revenues coming in. Also, tourism is way up now and increased visitor spending helps to subsidize the rail. The GE tax is barely felt and does not influence the expenditure decision. This latest report on revenues bodes well for getting rail completed at a reasonable cost.
Please don’t forget this money can be better spent to fix our decaying infrastructure. The Rail will do nothing if People don’t have water or sewer, electricity, roads, etc.
idio-t
Rail is about theft. It’s that simple. We now know the shoddy construction poses serious structural threat issues. Those will be extremely expensive, and time consuming to re-do. It’s way past time we shut this down. Just stop building now, and turn off the spigot of cash being stolen by those dipping their beaks.
I agree. The GET tax is the best source of revenue for rail. No city revenue is used for rail. So city needs are not affectted by rail.
wiliki says: “No city revenue is used for rail. So city needs are not affectted by rail.”
What about the needs of struggling taxpayers who see their saving stripped to feed this bottomless, leaderless, unacceptable money pit? Every spare a thought for them?
ukuleleblue says: “We are in a very strong economy now so we can expect to see more general excise tax revenues coming in.”
Hey there Bagdad Bob, did it ever occur to you to read the article before pasting in your lazy boilerplate cheerleading nonsense?
“Overall, the project’s GET collections are tracking about $36 million less than projected to this point… In 2014, rail officials predicted that they would fall short by about $100 million in surcharge funding by the time the tax expired in 2022. ”
But since you’re here commenting, would this be a good time to tell everyone where you live on the mainland and tell us what your connection really is to this mess of a rail project?
Uku: What happens to all that revenue you think is strong when we have the inevitable recession sometime over the next 11 years?
I know I’m doing my part and ordering things from Amazon and shipped to me for free so I avoid paying that darn surcharge.
How can the GET collections for Oahu go up in a quarter, while the surcharge, which is based on those collections, goes down?
Because HART isn’t the only unaccountable mess in Hawaii.
Because the state is doing the accounting. You don’t think they are taking more than their 10% skim do you? Nah.
Was thinking the same thing. No automated systems with the state so somebody did the wrong math on the 3 by 5 card used to keep the records.
Keep electing the same corrupt (D) politicians Hawaii, you’re getting what you deserve.
Keolu. They could NEVER start from UH because the train does NOT fit at UH without major relocation of water, sewage, lines and numerou eminent domain of homes and apartment complexes in order reach anywhere near UH and major traffic jams. University Ave is really the only way to UH but that street is narrow and extremely densely populated. Also the construction crews who are building the train had zero experience in train railway construction and needed to learn how to build it in an empty field in Kapolei. Even then they made some big errors that need to be fixed. Also to build anywhere near UH would cause major TRAFFIC JAMS, not only for all the commuters to/from UH but also all of the private schools close by like Punahou, Iolani, Mid Pac, St Francis, St Loius, Maryknoll etc. Most of downtown Honolulu will be one giant parking lot if rail construction starts in town. The technology of steel on steel with 72,000 pound train cars are to big and wide and is all WRONG for Oahu. The only way an elevated train will one day make it to UH and Waikiki is a modern maglev or semi-maglev ‘lightweight’ train made of lightweight steel, aluminum or composite that has a narrow footprint that allows much skinnier columns that can spaced farther apart then the current train they are building now. Then relocation of utilities like power, sewage, gas and need for eminent domain or loss of road lanes would be minimized. Also lightweight train using more efficient propulsion would use less electricity and maybe once PV is allowed to saturate all Oahu homes and buildings and the power company develops real storage capabilities like lithium or even flywheels and use LNG type turbine electric generators that much faster and capable of handling wide power fluctuations due to PV generation, they might be a need to have to build an entirely new fossil fuel generator for the train. For now just END RAIL NOW and take the $1-2 BILLION loss as thas is the BEST outcome Oahu residents and taxpayers can hope for with Mufi/Kirks’ rail project.
Thanks inverse. Great analysis. Are you in the train business?
An additional $1.5 billion over 5 years is $300 billion per year. They have yet to even come close to that since they started. Even if you assume a 2-3% growth rate due to inflation you still won’t get to $300 billion. And let’s not forget the state take a 10% skim off the top of whatever is collected.
One more dose of reality: Between now and 2027 we will have a recession that will effect tourism that everyone counts on to contribute to this GET surcharge. To suggest in this projection that we will never have a recession over the next 11 years is ludicrous.
More fantasy from HART and the Mayor. Welcome to la-la land in the Pacific.
Doesn’t anybody – like the Star Advertiser – do a sanity check on the numbers that the press releases just say? How about some fact checking, historical trends and even back-of-the-envelope keeping them honest?
300 billion per year? holy tamales!!!
Ok, $300 million. But you’re a smart guy and get the point.
That sucking sound you hear? That’s the financial black hole of a rail project taking down more tax revenue and soon to be demanding more money. I can see that we’re being set up for more demands for increased funding for this pig of a system. The future generations will curse us for burdening them with the ever increasing and ongoing cost of the most expensive, per-capita, transportation project in the history of the United States.
Nope much of the cost is exported to tourists. Taxpayers don’t notice the change.
And what happens when the recession hits sometime in the next 11 years and they don’t show up in the same numbers? And then oil increase and raises the price of jet fuel, which is already happening, and airfares go up causing some of your beloved tourist to say “nope, just too expensive for me”?
I guess you are too naive with rose colored glasses to even consider, or admit to, the possibilities.
You do know that when Mufi proposed this folly of a project and stated that tourists would pay 1/3 of the cost due to their spending, he gave false information. He used the 1/3 revenue based on what the State as a whole collects from tourist spending. In actuality, what the tourists spend on Oahu only makes up about 12% of tourists spending in the state. So your cost is exported to tourists claim is another lie told by you.
IRT wiliki: For YOUR information, I DO INDEED notice the change, every time I purchase goods and services. And I’ll bet many of the taxpayers also notice the change when they purchase goods and services. A half percent here, a half percent there; it adds up, to death by a thousand cuts! As for the tourists, they DON’T live here and have to face the day-in, day-out costs of the taxes; WE DO. And the future generations of residents/taxpayers will also feel and notice the tax bite.
I bet some people are sorry that they bought houses right next to the rail route.
cholo bet they mad like hell
See HART wants more money!
This tax is processed by hand. Not surprised that the revenue changes per quarter
Yeah, and the rail project is built by hand too. Especially noticeable when the guideway segments don’t match up and align properly, when there’s cracks in the guideway structure, and the copious amount of rust on the steel rebar and rail tracks. That system is falling apart before it’s even completed, much less operating, if ever.
The Mayor should not run for reelection. He should devote his time to the Rail.
PUT THIS THING TO VOTE!!!! Election time is around the corner and they have not printed the ballots yet.