Lawmakers grill Caldwell on pitch for permanent rail tax

Published: Jan. 24, 2017 at 3:50 AM HST|Updated: Jan. 24, 2017 at 9:27 AM HST
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Honolulu Mayor Kirk Caldwell (Image: Hawaii News Now)
Honolulu Mayor Kirk Caldwell (Image: Hawaii News Now)

HONOLULU (HawaiiNewsNow) - Honolulu Mayor Kirk Caldwell faced tough questions as he tried to convince state lawmakers to approve a permanent extension of the 0.5 percent general excise surcharge used to fund the cash-strapped rail project. They wanted to know what was being done to control rising costs. With a $5.2 billion budget two years ago, Caldwell assured legislators at that time that an extension through 2027 would cover a $910 million shortfall.

"Now we're talking about just cost of $8.2 billion, and you add the financing charge through 25 or 30 year bonds to pay the interest, it's around $9.6 billion," Caldwell said. "Let's just round it up to $10 (billion), because I can't tell you for sure what it's going to be."

The $8.2 billion construction cost estimate includes roughly $1.4 billion in contingency funds.

"You've really got to take a look at giving us some real numbers and being really clear about your costs. Don't call it a contingency if it's a real cost that you're just putting into the category contingency because you know you need it," said Sen. Jill Tokuda, chair of the Ways and Means Committee.

Rail officials have until April 30 to submit a new recovery plan to the Federal Transit Administration with funding secured for the full 20-mile route to Ala Moana or Plan B which would end somewhere between Middle Street and Aloha Tower.

"The city is contemplating raising the vehicle weight tax, gas tax, other things for operational costs. Why can't you do that sooner rather than later and help pay for the actual construction of this rail project?" questioned Sen. Glenn Wakai (D, Kalihi-Salt Lake).

Caldwell told lawmakers that the city would look into other revenue options.

"Should the surcharge be extended, we will issue revenue bonds. That's real skin in the game. Also, should this project fail, the full faith and credit of the city and county of Honolulu backs it up," Caldwell said.

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