For years, local residents and community members have pressed for details on how the city plans to pay for rail operations.
On Thursday, Honolulu Mayor Kirk Caldwell delivered a broad outline — but not many specifics — on how the city might “start to cover” those added transit costs.
Caldwell, who terms out of office next year, suggested the city’s new property tax increases targeting hotels and investment homes, combined with the steady growth in Honolulu property values, would make it work.
In the years ahead “I think these revenues continue to grow,” Caldwell said during a press briefing in his office Thursday. “These enhanced revenues from these two sources … will cover, will generate enough revenue to pay for the subsidy of a rail system and a bus system.”
It remains to be seen how that budget would work.
Mayor Kirk Caldwell held a press conference Thursday to discuss where his administration is going to find the money to pay for operating the Honolulu rail system.
Cory Lum/Civil Beat
City finance officials estimate the hotels and investment home tax increases under City Council Resolution 19-55 will generate an additional $17 million and $14 million respectively in the next fiscal year — a combined $31 million.
Caldwell, meanwhile, said the city now estimates it would cost $37 million when the elevated transit line opens for interim service as far as Aloha Stadium — and then $80 million in its first full year of service.
Some of those transit costs would be covered by passenger fares, but under Honolulu’s fare box recovery policy the city subsidy is expected to cover at least two-thirds of the total operating budget.
Caldwell said the island’s appreciating property values would enable the city under his successors to cover the rest. Honolulu has averaged 5.4% growth in value in the past decade and just under 4% in the long term, he said.
Earlier this year, Caldwell expressed hope of using the revenues from proposed trash-collection fees to help fund rail operations, but City Council members later rejected the idea. Still, the mayor said this was a key moment to “raise revenue” for rail since next year is an election year.
“There’s going to be folks running for mayor and other positions. It’s hard in an election year to go to the public and say we want to raise revenue,” he said Thursday.
HART is racing to try and make its internal deadline of December 2020 to launch interim service along the first 10 miles. But design and manufacturing issues with the westside stations’ canopies have slowed progress toward that goal.
HART also hopes to complete the full 20-mile, 21-station line to Ala Moana Center by December 2025, but Federal Transit Administration officials believe September 2026 is a more realistic target.
“These numbers that are given out — I used to repeat them, made them my own,” Caldwell said Thursday of HART’s projections. “I don’t do that anymore. I want to believe, but I’m skeptical.”
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