Included in the $1.9 trillion COVID-19 relief package that’s moving through Congress is $70 million to help cover the hundreds of millions of dollars that Honolulu’s rail transit is projected to lose because of the pandemic.

Sen. Brian Schatz, who now chairs the Senate’s Appropriations Subcommittee on Transportation, announced the funding in a release Sunday.

“Our goal here was to help the city pay for part of its share by covering the loss in local tax revenue caused by the pandemic,” Schatz said. “This provides some relief, but (the Honolulu Authority for Rapid Transportation) and the City must still come up with a workable financial plan and get this project up and running for the people of Honolulu.”

Oahu’s rail project continues to struggle financially as its costs have spiked yet again and tax revenues have evaporated amid the pandemic.

Senator Brian Schatz in Honolulu Civil Beat office. 31 may 2017
U.S. Sen. Brian Schatz: “This provides some relief, but HART and the City must still come up with a workable financial plan.” Cory Lum/Civil Beat

For 2020, rail lost some $62 million in room and excise tax dollars that the project had expected to collect. The $70 million in rail funds in the federal COVID-19 relief bill would cover that amount.

Those dollars “will enable HART to continue working toward its critical path construction goals,” HART Interim Executive Director Lori Kahikina said in a press release Sunday.

However, HART finance officials forecast that rail faces a total COVID-related loss of $376 million in room and excise tax revenues alone over the life of the project. Indeed, HART’s release on Sunday said the $70 million will cover “a portion” of the shortfall related to the pandemic. It’s not clear yet how the remaining shortfall will be covered in the years ahead.

Those room and excise taxes combined are the largest funding source for the struggling transit project. They’re expected to generate some $7 billion toward rail.

Rail faces a potential funding loss on another front as well: Some $500 million in federal dollars are slated to lapse at the end of this year.

That includes the $250 million that was scheduled to lapse in December but received a yearlong reprieve with just days to spare, plus an additional $250 million payment that’s scheduled to lapse at the end of this year.

Federal transit officials have not released any of their grant dollars dedicated to Honolulu rail since 2014 due to the city’s inability to get the project done.

Previously, FTA leaders said they would only release the money when the city issued the last major construction contract needed to complete rail as far as Ala Moana Center, as long as the contract came in on budget.

Those steps won’t be completed by December, however, HART officials say. It remains to be seen what progress the FTA needs to see this year in order for the city to hold on to its federal rail dollars.

“FTA’s goal is to ensure that taxpayer dollars are used as intended, and that the project is delivered as agreed upon by the project sponsor under the Full Funding Grant Agreement (FFGA),” the agency stated in December.

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