Mayoral candidate Ben Cayetano says he would use revenue from the state general excise tax surcharge currently designated for rail to fund a new Bus Rapid Transit system, and do it without seeking special permission from the state Legislature.
The excise tax surcharge is expected to raise nearly $3.36 billion, which the city intends to spend on the planned 20-mile rail system.
However, Cayetano said that money could instead be used to pay for much of his "Flexible Affordable Smart Transportation" system, which he is offering as an alternative to rail.
If people disagree with Cayetano’s interpretation of the law, "then if I’m the mayor, then we plan to resolve that thing in court," he said in an interview Friday.
"I don’t think that will happen," he said of the possibility of a court challenge over the use of the excise tax funding. "If I get elected, I don’t see why anybody would."
Cayetano opposes the $5.26 billion rail project and promises to stop it if he wins the Nov. 6 election over former city Managing Director Kirk Caldwell.
Cayetano is proposing a $1.5 billion alternative package of transportation improvements that includes expanded bus service, construction of urban underpasses to ease the traffic flow on some city streets, new contra-flow lanes and a two-lane extension of the H-1 freeway over Nimitz Highway to an area near the Hilo Hattie Store in Iwilei.
Cayetano released on Sunday a cost breakdown of his alternative package that shows the city would pay $950 million of the cost of his FAST proposal, or about two-thirds of the total cost.
The plan proposes that the state contribute $210 million to FAST, and for the federal government to contribute $300 million.
Cayetano said he plans to tap revenue from the excise tax surcharge to cover much of the city’s share of FAST funding.
The 2005 law that created the surcharge says the money must be used for construction or operation of a "locally preferred alternative for a mass transit project." The law also prohibits the use of the excise surcharge money to "support public transportation systems already in existence prior to the effective date" of the law that created the surcharge.
Cayetano said there is enough flexibility in that law to allow him to use the surcharge funds for the BRT efforts without returning to the state Legislature first.
He contends a new federal law called Moving Ahead for Progress in the 21st Century Act, or MAP-21, classifies BRT projects as "fixed guideway" systems that qualify for both federal funds and funds from the surcharge.
However, Cayetano said he does plan to ask the Legislature for other adjustments in the surcharge law that will allow him to spend some of the money on non-transit-related items. For example, Cayetano has said the city must make major investments in its aging water and sewer systems.
House Finance Chairman Marcus Oshiro, who was House majority leader in 2005, said the Legislature always intended the excise tax money would pay for a rail system.
Oshiro, who supports rail, said it would be extremely difficult to persuade lawmakers to amend the law to finance new projects.
Reopening the issue now for any reason will trigger intense lobbying by critics who want the tax repealed entirely, putting pressure on lawmakers, Oshiro said. The Legislature will also be concerned about the uncertainty of federal funding, and will be unsure exactly how the excise surcharge money will be used, he said.
"Talk about the fear of the unknown, that’s even a greater fear there," he said.
U.S. Sen. Daniel K. Inouye and others have said abandoning rail would mean the loss of $1.55 billion in federal funds the city is seeking. The Cayetano plan envisions a much smaller federal contribution, which means less federal money would flow into the state.
Cayetano dismissed the concern about losing the bulk of federal funding. "First of all, we don’t have that money. There’s no guarantee we’re going to get that money. Sen. Inouye says he’s very confident, but we may not get it."
Cayetano added, "I think it’s bad policy to chase that kind of money just for the sake of chasing that kind of money and build something that will have a permanent and bad effect on the character of our city."
Nearly $320 million of the FAST funding Cayetano is proposing would be used for new bus express routes, new Bus Rapid Transit routes and widening of North King Street by two lanes to accommodate buses and other traffic as part of the system.
The Cayetano plan calls for the federal government to pick up about $113 million of the tab for the BRT component of his plan, with the city paying the rest.
The most expensive single component of the FAST program is the $600 million "Nimitz flyover" extension of H-1. The two-lane elevated freeway extension would carry buses eastbound in the morning and westbound in the afternoon, and Cayetano said it might qualify for federal money since BRT buses would run on it.
To pay for the flyover, the Cayetano plan calls for the federal government to put up $180 million, and for a state contribution of $210 million. The remaining cost of more than $200 million would be provided by the city.
Cayetano said he will propose that the flyover be a city-state "joint venture."
"I think that’s a good deal for the state because from everything that I’ve heard, they want to do it," he said. "The Middle Street bottleneck is a serious problem, and that’s what I would do, and explore that with the governor, and I feel pretty good about our chances."
The Federal Transit Administration has invested significant staff time and resources in reviewing and refining the city’s rail project over the past seven years, but Cayetano said he doesn’t believe that will disqualify Honolulu from federal funds for his FAST package.
"I think that (the FTA) would look at the readiness of the project. That, I think, would be most important if they act like true professionals instead of spoiled brats," he said.
"I expect that once the people speak, if they do and I’m privileged to be mayor, that our senator, he would be very disappointed of course, but he has already said that whoever is mayor he would work with us," Cayetano said. "In the end, Sen. Inouye will work for whatever the people of this city want."
Caldwell said in a written statement that "it is difficult to respond seriously to something that has not been vetted by any third parties and is so utterly lacking in detail on construction plans, costs and timelines."
"There is no detail whatsoever provided as to how he has arrived at his cost estimates and assertions. No backing data. No conceptual or technical drawings. Nothing," Caldwell wrote. "It’s clear to me that this has been cobbled together purely for political purposes and not to address Oahu’s critical transportation needs. Honolulu voters deserve better."
