The $6 billion question about Honolu-lu’s rail project, now projected to carry a price tag close to that amount, is less about the cost than about this: What is Honolulu going to get as a result of an alarming projected overrun of anywhere from $500 million to $700 million?
Before decisionmakers can agree on how to pay the mounting bills to finish the project — and at this stage, finishing it remains the desired outcome — they need to get more details from the Honolulu Authority for Rapid Transportation about exactly what cost-cutting will mean to the final product, as well as a full accounting of alternative financing strategies.
This kind of disclosure is mandatory before extending the general excise tax surcharge, the funding mechanism established by law, beyond its 2022 sunset date.
For one thing, extending the tax will almost certainly open the debate over what else the tax money could finance, including any possible expansion of the service to Manoa or central Kapolei.
That talk should be tabled until taxpayers have a clearer sense of what kind of rail project they’re actually buying.
The scariest part about HART Executive Director Dan Grabauskas’ presentation to the HART board last week is not only the sticker shock but the fact that it’s projected when so much of the project itself remains uncertain. About 40 percent of the work for the 20-mile rail line is still uncontracted, and the prospects of any good news on that front are slim. All the pretty pictures on the website, all the community forums about the look of the 21 rail stations, have been thrown into doubt.
The action plan Grabaus-kas unveiled seemed more aspirational than solidly prescriptive. Even given all the unknown factors — specifications for the contracts on most of the rail stations are still months away — it’s unnerving that the options haven’t been fleshed out more fully at this late date.
For example, there are bullet points with proposals to "explore alternative financing options for project components, such as the Pearl Highlands Parking Garage," and to "explore new partnerships with private and public entities" such as the state Department of Transportation, for access to federal dollars.
The clock is ticking, loudly, and one would have hoped that HART staff had progressed a bit beyond the exploration stage by now. Lawmakers contemplating alternate funding sources must have their options laid out in much fuller detail than that.
And about those alternative sources: Wisely, the city administration has all but shot down the use of the federal subsidy for the bus program, the $210 million in the so-called 5307 fund. Yes, the final transit network ultimately will be a composite of rail and bus lines, as HART officials argue, but in the meantime the bus is the sole mass transportation system serving the public. Raiding the fund now will leave the buses vulnerable to breakdown, especially since much of the fleet is old and needing replacement.
HART has not yet shown sufficient determination to tap another source of funds, one that rightfully belongs to the rail system. It’s the "skim" that has been taken by the state as an unwarranted administrative fee to collect the GET surcharge for the city, which lacks the tax-collection mechanism.
The state has taken 10 percent of the tax revenue, an amount that, over the life of the tax, would amount to about $450 million. That’s a money grab, plain and simple, and the city should get at least the lion’s share of that back.
Meanwhile, the state has become accustomed to this revenue stream. Mayor Kirk Caldwell speculated that lawmakers might be motivated to extend the GET if it means the administrative fee keeps fattening state coffers.
But rushing to adopt a GET extension is appalling. The half-percent surcharge, compounded at each transaction level through Hawaii’s economy, adds to overall costs to a degree that’s especially traumatic to small business, already burdened by other rising taxes and government-mandated expenses.
Before officials go there, they need to make it clear to the public exactly what can be done to reduce costs. HART’s ideas about repackaging the remaining contracts in configurations that are smaller, simpler and more appealing to Hawaii’s risk-averse construction industry are good ones.
Reducing the number of stations is a possibility, though one to be pursued with caution. Stations that are too far apart may depress ridership, and federal authorities would not happily embrace that idea.
Making the stations simpler, with less spent on enhancement, at first sounds like a grim notion. But a scaled-down rail station also could be less visually obtrusive. Giving transit-oriented development candidates an incentive to provide some of the station amenities, in exchange for leeway in building height and other aspects, is another promising idea to reduce the cost of station construction.
What the public wants now, above all, is solid planning for the way forward, and no more rude surprises.
Everyone is tired of hearing the blame-game references to the costs imposed by the lawsuits against the project.
That’s in the past, and if the rail is to have a future — providing safe, rapid transportation for Honolulu’s commuters desperate for relief from the freeway slog — we need to hear about it. HART officials need to get cracking.
