Hawaii legislature to take up rail project funding in special session

Written by Mischa Wanek-Libman, editor
image description
Crews work on concrete forms at Hoopili Station.
Honolulu Authority for Rapid Transportation

State lawmakers will take up the issue of funding the Honolulu rail project this week in a special session.

A proposed bill would extend the general excise tax (GET) surcharge and increase the hotel room tax in order to provide the city and county of Honolulu with enough funding to complete the $8.2-billion project. The bill would also require a state run audit of the rail project, as well as annual financial reviews.

In December 2012, the Federal Transit Administration (FTA) and the city signed a Full Funding Grant Agreement committing the federal government’s $1.55 billion for Honolulu to build a 20-mile elevated rail system with 21 stations. With project cost estimates increasing, transit leaders asked FTA to increase the funding commitment to the project. The request was denied leaving transit leaders the option of changing the scope of the project or finding another solution.

Hawaii House Speaker Scott K. Saiki (D-Kakaako, Downtown) said the $2.378-billion funding shortfall package will fund the rail project through Ala Moana and will not jeopardize the $1.55 billion in federal funding.

The proposed bill would place funds collected for the rail project into a new Mass Transit Special Fund where the state comptroller would review and disburse those funds to the city for its costs as the project moves forward, allowing the state to track spending and construction progress of the rail project.

State lawmakers say having the combination of GET and hotel room tax provides greater security for the project should either not perform as expected.

“By working with our colleagues in the Senate, the Legislature has come up with a concrete plan to fund the rail project that will reduce the overall costs while shifting some of the regressive tax burden away from our residents, who are struggling to make ends meet,” Rep. Saiki said.

Hawaii Senate President Ron Kouchi (D- Kauai-Niihau) said, “I am hopeful that this compromise legislation will satisfy the FTA’s construction cost concerns as testified to numerous times by the city and county of Honolulu.”

Hawaii Gov. David Ige expressed his pleasure with the proposed bill in a statement the said, in part, “I’m elated that legislators have come to an agreement that will move the rail project forward. I’m particularly pleased that the state will have increased oversight for this project…I firmly believe transit is a strategic asset for our communities that will enable us to provide affordable homes for our families while preserving open space outside the urban center.”

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