'Black hole'? Senate approves rail bailout, but not without debate

'Black hole'? Senate approves rail bailout, but not without debate

HONOLULU (HawaiiNewsNow) - Boondoggle. Budget-busting. Black hole.

Those are some of the ways state senators described Oahu's troubled rail line Wednesday as they debated whether to pass a bill that would generate nearly $2.4 billion to bail out the project.

"When we passed that first increase in the GET, my wife and I just learned that week we were expecting our first child," said state Sen. Josh Green. "Maia is 10 years old today. This week the tax that was supposed to be temporary, will be extended at least until she's out of college. And the project won't be completed until Maia is an adult with children of her own."

In the end, senator did OK the measure, voting 16-to-9 to send the bill to the state House for consideration in a major step forward.

But there continues to be significant concerns about the bill.

"I'm opposed to ... this, a Brobdingagian budget busting boondoggle that has become a black hole sucking in all of the priorities," said state Sen. Gil Riviere, a member of the Ways and Means Committee.

The nine who voted against the measure are:

  • Sen. Rosalyn Baker (South and West Maui)
  • Sen. Kalani English (Hana, East and Upcountry Maui, Molokai, Lanai, Kahoolawe)
  • Sen. Josh Green (Kona, Kau)
  • Sen. Breene Harimoto (Pearl City, Momilani, Pearlridge, Aiea, Waimalu, Halawa, Pearl Harbor)
  • Sen. Lorraine Inouye (Hilo, Hamakua, Kohala, Waimea, Waikoloa, Kona)
  • Sen. Kaialii Kahele (Hilo)
  • Sen. Gil Riviere (Kaneohe, North Shore, Wahiawa, Kunia)
  • Sen. Russell Ruderman (Puna, Kau)
  • Sen. Laura Thielen (Kailua, Enchanted Lake, Waimanalo, Hawaii Kai, Portlock)

The timing of the special session vote, and future debates by the state House, remains of critical importance to the project.

The city has only until Sept. 15 to show the Federal Transit Administration a plan to raise the money to cover the project's budget shortfall – or risk losing $1.55 billion in federal grant funding it has already received.

Lawmakers have called the funding bill a breakthrough compromise to bail out the project, but city leaders continue to insist the proposed deal leaves the project at least $600 million short.

The mayor has said he wants to support the deal, but is seeking some tweaks. The legislature's agreement extends the existing half-percent general excise tax surcharge on Oahu for three additional years through 2030, which will generate about a billion dollars.

Mayor Caldwell recommended that number be extended to five years. If lawmakers don't agree, Caldwell instead asked them for a promise.

"Make a public statement that should there not be sufficient funding from the perspective of the City and County of Honolulu, you will step up with us as our partners in a legislative session somewhere down the future to address that shortfall," Caldwell said.

The bill also raises the statewide hotel room tax 1 percent for the next 13 years -- which equates to about $1.3 billion for upfront construction costs. To help please the neighbor islands, the counties' share of the hotel tax goes up from $93 to $103 million.

The proposal would also reduce the state's administrative fee, or skim, on collecting Oahu's rail tax from 10 percent (around $30 million) to just 1 percent (about $3 million).

The bill would also require a state audit and annual reviews of the Honolulu Authority for Rapid Transportation. Additionally, the Senate president and House speaker will have the power to appoint two non-voting members to HART's board of directors.

Finally, the measure creates a mass transit special fund, where all the collected rail taxes will go and which the state would then distribute to HART to cover construction costs.

The partially built rail line is years behind schedule and way over budget -- with the estimated price tag ballooning from $5.26 billion in 2014 to nearly $10 billion, including financing costs.

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