The Senate Ways and Means Committee on Tuesday voted to extend a 0.5 percent General Excise Tax surcharge for Honolulu’s rail project another five years beyond its Dec. 31, 2022, expiration.
But by limiting the extension to five years with additional caveats, the senators also showed that they don’t want to write a blank check to the city and the Honolulu Authority for Rapid Transportation without more assurances about how those taxpayer dollars are being spent.
“First and foremost, the Senate is very clear that it wants to make sure that the job that was started is completed,” said Sen. Jill Tokuda, who chairs the Ways and Means Committee. “In terms of the information that we’ve been provided we feel that this is giving HART and the city a great deal of opportunity.”
The bill will likely go to conference committee, where House and Senate members will hash out a final version. Legislation can dramatically change or even die during conference committee, which is conducted largely out of the public eye.
Another proposal related to the GET, Senate Bill 19, appears to have stalled out in the House Finance Committee as there has been no hearing scheduled for the measure, meaning HB134 is the likely candidate for a final vote.
“It’s absolutely critical to how we live on this island not just today, not just 25 years from now, but 100 years from now.” — Honolulu Mayor Kirk Caldwell
Tokuda said she has “serious concerns” about how the city plans to operate and maintain the system once it’s built, and noted that she doesn’t think GET surcharge revenues should be used for that purpose.
As a result, she included an amendment to HB 134 that would only allow the funds to be used for construction costs on the 20-mile route from East Kapolei to Ala Moana Center. If there’s money left over those funds could also be used to plan additional spurs to downtown Kapolei and the University of Hawaii at Manoa.
Tokuda questioned Caldwell and Honolulu Department of Transportation Director Mike Formby over how the city expected to pay for operations of the rail and bus system together since fares are not expected to cover the full cost.
The city heavily subsidizes the bus and Handi-Van services with more than $200 million per year. With rail online the amount the city must make up is even higher.
In 2020, HART has estimated the city’s total subsidy for rail, bus and Handi-Van services will be $316 million, according to documents provided to the Legislature. By 2030 that amount is expected to increase to $490 million, which is less than one-third of what is expected to be recovered from fares.
But what seemed to worry Tokuda was that the city hasn’t yet determined how it would cover the gap, although Formby told her that several groups have been formed to look at farebox and other revenue options.
“We’re committed that we will have a solution that we can present to the public,” Formby said. “But I can’t tell you today that we will have the answer. We certainly don’t. But we’re committed to have a solution.”
Honolulu Mayor Kirk Caldwell pushed hard to convince senators to approve a 25-year tax extension so that the additional spurs into Kapolei and to the UH-Manoa campus could be built. Officials have said the 25-year extension would be enough to complete both legs.
“The only thing we can do is deny them the taxpayers’ money. It’s not our money, I keep reminding them, it’s taxpayers’ money.” — Sen. Sam Slom
Caldwell even proposed his own version of HB134 that would push the sunset date to 2047 in exchange for the city reaching certain milestones, including obtaining environmental clearance for those future spurs and performing financial and management audits of HART.
The mayor took advantage of last week’s traffic snarl that led to widespread gridlock and commuter wait times of up to five hours to advocate for the rail project. He also expounded on the benefits of transit-oriented development around the system’s 21 rail stations as a means to boost the island’s affordable housing stock.
“It’s absolutely critical to how we live on this island not just today, not just 25 years from now, but 100 years from now,” Caldwell said. “It is the only near-term solution to our traffic problems and to our housing problems.”
But lawmakers were unconvinced, particularly Sen. Sam Slom. The Senate’s lone Republican loudly criticized the project for having a nearly $1 billion deficit with just over 2 miles of railway actually constructed.
He told Caldwell the city should be grateful that the Senate is even considering extending the GET surcharge for five years, saying that his colleagues have thrown out a financial “lifeline” to bail out the project even though there are still many unanswered questions.
“The city and HART have had long enough time to demonstrate to us that they can keep their word, that they know what they’re doing, that they can give us accurate information and figures that match, and that has not been the case,” Slom said. “The only thing we can do is deny them the taxpayers’ money. It’s not our money, I keep reminding them, it’s taxpayers’ money.”
Slom, who voted against HB134 along with Sen. Gil Riviere, said he also intends to ask Attorney General Doug Chin for an opinion on the “legality and constitutionality” of the state’s 10 percent administrative fee on the GET surcharge.
The current version of the bill does not address the fee, which will amount to hundreds of millions of dollars in revenue for the state for the duration of the surcharge.