The leader of the Hawaii State Senate promised on opening day of the 2017 Legislature that the issue of paying for Honolulu’s rail system will be concluded before the session ends in early May.
But he did not say how it would be concluded.
Speaking before a full Senate chamber Wednesday filled with dignitaries, relatives and friends, Sen. Ron Kouchi said his colleagues “need a lot more information” before they make a final judgment on what to do about the project that is currently estimated to cost as much as $9.5 billion.
Ideas for funding are “wide open,” Kouchi told reporters later, stating again that he supports the rail project.
“There is no plan that anybody’s got their hands around,” he said.
But House Speaker Joe Souki has something of a plan.
In his opening day remarks delivered in a similarly packed House chamber, he reiterated his goal of removing the sunset date on the rail financing bill approved just a few years ago.
He also called for cutting in half the 10 percent administrative cost levied by the Legislature on the general excise tax surcharge paid by Oahu residents and visitors.
Rail, said Souki, is a solution to relieving traffic.
“We have watched as the numbers have ticked up. Not just tens of thousands, not just hundreds of thousands, not just a couple million at a time, but billions. This is unacceptable.” — Sen. Jill Tokuda on rail’s price tag
“It does come with a high cost, but make no mistake, rail is the key to the future of Oahu,” he said.
Still, there is no agreement between the two legislative bodies on how to pay for the biggest public works project in the state’s history. The Federal Transit Administration has asked that the city explain by April 30 how it will fund rail, or else risk losing $1.55 billion in federal money for the project.
House and Senate leaders agree that the City and County of Honolulu should “put some skin in the game,” as Senate Ways and Means Chairwoman Jill Tokuda said at a press conference following the floor session.
But the city cannot provide funding, she said, until it removes an ordinance that requires rail funding to only come from the GET or the federal government.
Souki, meantime, has called for cutting the 0.5 percent surcharge to 0.425 percent, “with the city making up the difference.”
Kouchi indicated that low-income earners might become eligible for a tax credit because of what he described as “the regressive nature” of the GET.
He said he would like to find a way to export “more of that GE tax to the visitors, which I think everyone would like to do as opposed to just taking it out of the pockets of our residents. So that’s the problem of why we are very far from any kind of solution.”
He continued, “But certainly on opening day, I want to say in a clear voice that I have been a supporter (of rail) and I am trying to look for a solution. But it’s very fuzzy when I look out there.”
A big reason for the fuzziness is a lack of solid numbers on the cost of rail.
“It does come with a high cost, but make no mistake, rail is the key to the future of Oahu.” — Speaker Joe Souki
“Obviously I think there is still a lot of unanswered questions from even the last time they came before us,” said Tokuda. “I think what we need are solid answers that we can hang our hat on. This is taxpayer money we are talking about.”
Tokuda said that the credibility of the Honolulu Authority for Rapid Transportation is at stake, but also the Legislature’s. When it approved the surcharge extension to 2027, she noted, the public was promised that that would be the end of it. But now, Souki wants to have the surcharge in place in perpetuity.
“I’ve yet to see a solid operations and maintenance plan from the city … that tells me how much it’s going to cost to operate and maintain a transit system which will include bus and rail and the HandiVan, and how are they going to pay for it without having to depend on the surcharge,” Tokuda said. “Because we made very clear to them last time, ‘You will not use the surcharge. You have to find your own means of finance.’”
Asked what she needed to hear from Honolulu Mayor Kirk Caldwell when it comes to the GET and rail, Kouchi interrupted.
“‘Pretty please,’” he said, garnering laughs.
But Tokuda made clear she would not budge on her demands, ones that have also been made by House Finance Chairwoman Sylvia Luke.
“We have watched as the numbers have ticked up,” Tokuda said, “Not just tens of thousands, not just hundreds of thousands, not just a couple million at a time, but billions. This is unacceptable.”
Still, there is a lot of support for rail, including on the fifth floor of the Capitol.
“I do know that we have to complete the project, and it really is about coming together on what we can afford to commit on the project and how we can define a project that we can support,” the governor told reporters. “So I think that’s the key.”
Ige said he heard much from Souki and Kouchi on opening day about “common values and priorities,” which he said suggested to him that his administration would be able to work together with the Legislature.
Ige, for example, said he was open to the idea of studying the possibility of toll roads, as Souki has proposed.
Traffic congestion, Ige observed, is a growing problem, and not just on Oahu. As someone who has commuted to town from the Aiea-Pearl City area for decades, he said that he knows of what he speaks.
Ige also said he believed there would be an agreement on a state budget, even though Luke and Tokuda have repeatedly blasted the administration on what they say has been a poorly produced document.
“I think they know what the process is,” said Ige, a former Ways and Means chairman. “We do know that Council (on Revenues) convenes once a quarter,and adjusts the revenue forecast every time. And this is typical, right? I build the budget on a forecast that is six months old. I submit it. There is a change in the forecast in January, and the final forecast that will define the parameters of the budget is really the March forecast.”
In a recent interview, Souki, himself a former Finance chairman, said he had confidence in the governor’s budget and did not blame him for a shortfall of $155 million. He said the Council on Revenues could also increase the revenue projection in March.
“There has been some discussion that there is a problem between the House and the governor,” Souki said. “And as far as I’m concerned, there is no problem between the House and the governor. I always look forward to working with him.”