Honolulu City Council leaders continue to seek a cap on the amount of general excise tax surcharge money that can go toward the construction of the contentious, 20-mile rail transit project.
Bill 23 (2015) authorizing the 0.5 percent surcharge to be extended by five years into 2027 goes before the Council Budget Committee at 9 a.m. today for what may be its last go-round before an expected Jan. 27 final vote of the full Council.
In December, the last time the full Council held a vote on the bill, members voted 7-2 to give it the second of three approvals.
But that vote occurred after a heated debate over whether to remove a cap, which was initially inserted into the bill by Council Chairman Ernie Martin in the fall. Members voted to keep the cap, 5-4.
Council Transportation Chairman Joey Manahan is in the thick of the discussions. A longtime rail supporter, he has been voicing increasing discontent over how the project’s costs have skyrocketed and was among those in favor of a cap during the December vote.
Manahan told the Honolulu Star-Advertiser on Tuesday that he has been working with Martin and leaders of the Honolulu Authority for Rapid Transportation to hash out a new draft of the bill that’s more palatable to all parties.
“Our goal is to ensure that the rail project receives the funding it needs while satisfying the terms of our full-funding grant agreement with the Federal Transit Administration,” Manahan said in a statement.
“It is also important that it meets the intent of the state Legislature and tightens up the reporting and accountability aspects of the whole project,” he said. “The proposed changes are vitally important because the final version of Bill 23 is the City Council’s main leverage to ensure the integrity and viability of the project.”
The agreement calls for the city to receive
$1.55 billion in federal money for the rail project, which is now estimated to cost $6.57 billion. Some, including Mayor Kirk Caldwell and Council Vice Chairman Ikaika Anderson, have warned that inserting a cap could be viewed as a breach of the contract and leave the city exposed to potential penalties.
The draft of the bill from the December vote caps the amount of new revenues going to rail at $910 million of the estimated $1.2 billion to $1.8 billion that would be raised during the extra five years. The $910 million represents the amount HART officials told state lawmakers last spring that they needed to meet additional expenses and contingencies.
Anderson said he will not vote for a bill that includes a cap because HART officials have warned that it won’t be enough to cover the cost of a 20-mile, 21-station project. Martin, meanwhile, said he won’t support a rail extension unless there is a cap that he believes will force transit officials to “stop the bleeding.”
Two key state lawmakers who voted for the surcharge extension last year voiced reservations about a cap.
Senate Transportation Chairwoman Lorraine Inouye (D, Kaupulehu-Waimea-North Hilo) said she’s inclined to think city officials will need to return to the Legislature in order to impose a cap, although she said wants to hear from Senate attorneys.
Inouye said Council actions to date constitute “political football,” and she wants HART to be able to proceed without any restrictions or further delays. “I think it’s just a waste of time. … Enough already.”
Senate Ways and Means Chairwoman Jill Tokuda (D, Kailua-Kaneohe) said city officials might not need to return to the Legislature to set a cap but wants to check with Attorney General Doug Chin’s office. “I think it’s a policy call they ultimately have to make.”
Tokuda said, however, that placing a cap may not be the best way to rein in costs on the project, especially because a five-year extension was approved based on anticipated unforeseen circumstances. “The cap just says you can’t go past this amount,” she said. “If their ultimate goal is to increase transparency and increase accountability, there are a number of other things they have to look at.”
If there is a cap, Tokuda said, the Legislature might need to determine what happens with the remainder of the money, including the possibility of returning it to taxpayers.
