Honolulu is on track to run out of money this year to finish building its elevated rail line after the Legislature concluded its 2017 session without reaching agreement on how to subsidize the project.
The lack of consensus leaves the 20-mile-long rail line, which is way over budget and far behind schedule, with a shortfall of about $3 billion.
In response to a question about how the city would pay for rail without the state’s help, Mayor Kirk Caldwell said he’s focusing entirely on trying to get lawmakers to hold a special session to fund rail.
“My preference is to put all my energy and focus in getting the House and Senate back together to pass a bill,” Caldwell said. “I’m not going to put my energy or focus on anything else until we know that’s no longer an option.”
Caldwell joined the rest of Hawaii’s mayors Wednesday to urge Gov. David Ige to extend the session, but Ige said he did not want to do that unless the two chambers could strike a deal.
The city only has enough money to complete the project to Middle Street, with an expected cushion of about half a billion dollars.
The lack of consensus in the Legislature on the rail funding bill is a shocking end to five months of legislative hearings and deliberations during which legislators consistently said the rail funding bill was a high priority.
The lack of agreement between members took its toll, including a big shake-up of legislative leadership. House Speaker Joseph Souki from Maui resigned from his position as speaker Thursday and his colleagues chose Rep. Scott Saiki from urban Honolulu to replace him.
Meanwhile, the state Senate is on track to replace Ways and Means Committee chairwoman Jill Tokuda with Donovan Dela Cruz. Tokuda gave an emotional speech Thursday, and Senate President Ronald Kouchi said May 12 will be her last day leading the powerful money committee.
As of Thursday, the House and Senate have extremely different views on how to fund the nearly $10 billion project.
The Senate prefers to extend the general excise tax surcharge on Oahu for 10 years until 2037 to help complete the rail project, an option backed by Caldwell and the tourism industry. The Senate killed the bill Thursday because it couldn’t reach agreement with the House, but the proposal could be revived in a special session.
The House backed a competing bill that would have allowed the surcharge to be levied for just one more year, to 2028, and increase the state’s hotel tax for 10 years. Lawmakers deferred the measure Thursday. That bill can’t be heard until 2018.
Caldwell said that he doesn’t know if the leadership upheavals in the House and Senate will help his case. But Senate Majority Leader J. Kalani English and the newly elected speaker, Saiki, criticized the mayor’s inconsistent estimates of the rail project.
Saiki told reporters that the Legislature hasn’t received accurate financial data from the city regarding the rail project throughout the legislative session.
“What the House of Representatives has asked the city for from the beginning of the session was for accurate and specific numbers,” Saiki said. “The city and HART have changed the numbers whenever they have submitted them.”
Caldwell flatly denied Saiki’s claim, and told reporters that Saiki voted against funding rail back in 2005.
But English agreed with Saiki and was even more critical, saying that the lack of accurate financial estimates from the city took a toll on lawmakers.
“Why couldn’t the city have taken care of what they needed to take care of?” he said. “Part of the reason it ended up in this situation of course is that the city never gave us good numbers, numbers that we could trust, numbers that we could work with, they kept on changing. Even up until yesterday it was changing.”
English had a message for the city: “If you give us bad numbers, you are not going to get a good result from the Legislature. Bottom line is we need to know the real numbers.”
The mayor noted Thursday that the cost of financing the project depends on interest rates and how the project is being funded. He also said that delays in building the rail project could drive up costs more than $100 million each year.
On Thursday, as the clock ran out, it was unclear whether a special session would be called to deal with the issue.
For the House’s part, Saiki, the new speaker, said there needs to be “a cooling off period” so the two sides can reflect on what to do with rail.
Kouchi said that allowing lawmakers to go home and spend time with their families will “maybe allow the temperatures to come down and then we’ll have a chance to come back and talk.”
“We need to take some time to regroup and get our energies back together so that we can think on this fresh,” English echoed.
Kouchi apologized for not reaching a solution for funding rail and said that he’s hopeful the Senate will seriously consider using the hotel tax at least in part to fund rail.
He agreed with Tokuda on that issue, and noted that many members’ objections were due to the fact that the idea hadn’t received a public hearing.
“If we hold the proper hearings then perhaps the Senate will be able to move closer to the position of the House,” he said.
Still, many Senate members are convinced that raising the hotel tax will hurt Hawaii’s economy. The tourism industry has lobbied against doing so.
Tokuda gave an emotional speech on the Senate floor Thursday, anticipating that she would be ousted as chair of the Senate’s money committee. She started to cry as she thanked her staff.
“I’m going to stop because I’m totally pulling a Suzy right now,” she said in reference to former state Sen. Suzanne Chun Oakland’s tearful farewell last year, prompting the chamber to erupt in laughter.
Tokuda quoted from “Star Wars,” saying, “You can’t stop change any more than you can stop the suns from setting.”
Kouchi told reporters after the Senate session concluded that Tokuda will remain chairwoman of the Ways and Means Committee until May 12 so that she can finish the committee’s work.
He said Dela Cruz will then take over for Tokuda unless the Senate decides differently.
Kouchi seemed sad that Tokuda had lost her post and said he would like to give her another role in the Senate if possible.
As for the House, Saiki said reorganization discussions are pending. But he also expressed how grateful he was for Souki having always challenged him and others to take risks and do what’s best for the state.
The vote to appoint Saiki speaker was 39-9, with three members absent.
It came after Reps. Marcus Oshiro, Calvin Say, Jimmy Tokioka and Sharon Har — all Democrats on the outs with the current leadership — expressed strong disapproval of replacing Souki on the last day of session.
Rep. Gene Ward, a Republican, said much the same. He then left the floor, refusing to vote.
But Saiki said the leadership change was driven in part by recognition that newer, younger members with different backgrounds and experiences want to see reform in the House.
Asked if rail was also a factor in the reorganization, Saiki said no.
Souki did not appear during Thursday’s session, and issued a letter that said in part:
Five years ago I did not seek this position, but was asked to lead this body in order to bring all members’ voices to our deliberations. I hope that to some extent I was able to do that. I was humbled to lead this body, and it has been an honor to serve the people of this state.