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Wednesday, October 31, 2018
Rail: Bill 42 Breaks a Promise
By Grassroot Institute @ 5:22 PM :: 641 Views :: Honolulu County, Ethics, Rail

Rail vote breaks promise — again

From Grassroot Institute, November 2, 2018

Sometimes, addressing rail funding can feel like you’re standing on the tracks, politely asking Hawaii’s policymakers to consider hitting the switch and redirecting the train before it runs us over.

That is why the Grassroot Institute of Hawaii this week was at a meeting of the Honolulu City Council. The Council was considering Bill 42, which would for the first time allow the use of city funds for the over-budget and behind-schedule Honolulu rail project.

In our testimony, we reminded the Council that in 2006 the full City Council had promised that city funds or bonds would not be used to fund the rail. To go back on that promise would be another violation of trust on a project that has continually violated the public faith.

Up to this point, the question of rail funding had led the Council to walk right up to the line of committing city money to the project. But now, after all that time spent balancing on that line, it has finally crossed it. The Council approved Bill 42 by a vote of 7-2. The two “no” votes belonged to Councilmembers Trevor Ozawa and Ann Kobayashi.

So now the question is how much the city will end up spending to finish construction … then pay for any continuing maintenance or administrative costs to keep it running.

The measure, approved Tuesday by the Council and signed Thursday by Mayor Kirk Caldwell, lets the city spend up to $214 million (and after 2020, only $26 million annually) to pay administrative costs on the East Kapiolani to Ala Moana line. We’ve been told that this is necessary only to meet the Federal Transit Administration’s (FTA) requirements for federal funding. The Honolulu Authority for Rapid Transportation claims it’s not really in need of cash — it just needs the money to satisfy the FTA.

So the next step is deciding where to get the money. Does the city borrow it? Reach into the operating budget? Take the money from the rainy day fund?

Caldwell said that the action plan on how to fund the $44 million will be presented on Monday. He said the plan would be transparent and won’t jeopardize anything.

We’ve already heard assurances that this will be the limit of the city’s fiscal commitment to the rail project. Taxpayers have been promised that they won’t be stuck funding an endless boondoggle.

Unfortunately, we’ve heard those promises before — back when the rail cost a few billion dollars less. And with every broken promise, the rail loses even more support.

As we told the Council in our testimony, approving Bill 42 “would significantly damage the Council’s credibility when it comes to any future statements and promises it might make about rail — or any other subject.”

E hana kākou! (Let’s work together!)

Keli'i Akina, Ph.D.

President/CEO

  *   *   *   *   *

Honolulu rail funding bill would break a promise

News Release from Grassroot Institute of Hawaii, Oct 30, 2018

The Grassroot Institute of Hawaii submitted testimony today (Oct. 30, 2018) to the Honolulu City Council Committee on Legislative Matters regarding Bill 42, relating to funding for Honolulu County’s rail project. The comments were submitted Joe Kent, Grassroot Institute executive vice president.

*****************************

Aloha, Chair (Ernest Y.) Martin, Vice Chair (Kymberly Marcos) Pine and other members of the Committee on Legislative Matters.

As you well know, your Committee on Legislative Matters is considering a measure, Bill 42, that would break the promise made by the full City Council in 2006 that city funds or bonds would not be used to fund the rail.

On Dec. 14, 2006, then-Councilmember Romy Cachola, as chair of the Council’s Committee on Transportation and Planning, wrote a committee report to then-Honolulu Council Chair Donovan Dela Cruz stating:

“Your Committee emphatically does not intend the capital cost of or debt service for the minimum operable segment to be paid with City real property tax revenues, City highway fund revenues, or City-issued general obligation bonds secured by the City’s general credit or reimbursable from the City highway fund.”

That report resulted in an update to Bill 79 — subsequently approved by the full Council and then-Mayor Mufi Hannemann — that stated:

“… Capital cost and any interest to finance that capital cost shall be paid entirely from general excise and use tax surcharge revenues, interest earned on the revenues, and any federal, state, or private revenues …”

Now, 12 years later — at a time when the rail project is vastly over-budget and behind-schedule — the Council is considering Bill 42 (2017), CD1, which would insert the word “city” in the list of revenues allowable to be paid for rail capital costs:

“… Capital cost and any interest to finance that capital cost shall be paid entirely from general excise and use tax surcharge revenues, interest earned on the revenues, and any federal, state, city, or private revenues …”

Clearly, enactment of Bill 42 would violate promise made by the Council and mayor to Honolulu taxpayers in 2006 that city funds would not be used for the rail project.

It also would significantly damage the Council’s credibility when it comes to any future statements and promises it might make about rail — or any other subject.

Mahalo,

Joe Kent,

Executive vice president,

Grassroot Institute of Hawaii

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