Lawmakers approve $1.2B for rail, but they're not happy about it

$1.2B rail funding bill passes amid disappointment from state, county officials
Published: Apr. 6, 2017 at 10:39 AM HST|Updated: Apr. 6, 2017 at 11:02 AM HST
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HONOLULU (HawaiiNewsNow) - In a late night vote Wednesday, the House Finance Committee approved $1.2 billion in additional funding for Honolulu's beleaguered rail project.

It's money that is desperately needed to finish the rapid transit project, but neither side is happy with the measure.

The funding bill wasn't the cash infusion rail supporter and Honolulu Mayor Kirk Caldwell had been hoping for, and it also wasn't a compromise state legislators -- who have been extremely critical of project spending -- were happy to make.

Several lawmakers are calling the bill a bail-out that serves more as a Band-aid than a real solution for the financially troubled project. Estimates for rail's costs have ballooned from a little more than $5.2 billion in 2014 to as much as $10 billion with interest, according to more recent figures.

However, both supporters and opponents of the project say Wednesday night's House committee vote will at least assure that rail can be built from Kapolei to Ala Moana without jeopardizing $1.55 billion in federal grant funding.

The House committee agreed to extend the current half percent General Excise Tax surcharge for an additional two years, which means it will now run through December of 2029 -- an increase that is expected to generate another $792 million for the project.

The measure comes with a requirement that GET funds can only be used for construction costs -- not maintenance or operation -- and not to fund the Honolulu Authority for Rapid Transportation administrative or personnel expenses.

The bill also reduces the 10 percent skim, which the state was taking off the top for collecting the GET surcharge, down to just 1 percent -- which is expected to equate to another $397 million for the project.

Caldwell had expressed frustration that the state didn't agree to the full 10-year GET surcharge extension he was asking for. Caldwell said the difference would have to be made up at the city level -- revenue that would likely come out of real property taxes.

The House Finance Committee Chair was also disappointed.

In a statement sent to Hawaii News Now, state Rep. Sylvia Luke expressed her concern that the city and HART have done little to consider cost cutting measures or alternatives to funding, saying that the measure was needed to ensure the the project wouldn't violate the conditions of their agreement with with the Federal Transit Administration.

"This is the second time the State has bailed out the City and County of Honolulu and HART for the rail project. The public and the Legislature has lost faith and confidence in their ability to provide an accurate budget estimate and control costs," Luke said.

The measure still needs to be approved by the entire House. That vote is scheduled for next Tuesday.

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