Lawmakers apologize after session ends with no rail deal; no talks set

HONOLULU (HawaiiNewsNow) - With nerves raw and no clear timeline for future talks, state lawmakers wrapped up the legislative session Thursday without reaching a deal on funding for Honolulu's beleaguered rail project.

While there's no agreement, state senators are pledging to continue talking with their House colleagues. A special legislative session could be called to tackle the issue.

Speaking to reporters Thursday afternoon, state Senate President Ron Kouchi apologized to the public for lawmakers' failure to reach a deal.

"I'm sorry and we'll try better the next time," he said. "Maybe allowing a lot of the temperatures to come down and then we'll have a chance to come back and talk."

A time out is needed because both chambers are so far apart.

The House is proposing a higher hotel tax and a bigger contribution from Honolulu taxpayers and the Senate wants to extend the .5 percent general excise tax surcharge on Oahu for 10 years.

"People need to take a step back and just reflect on this issue and just cool off," said House Speaker Scott Saiki, who replaced state Rep. Joe Souki as House speaker on Thursday.

In order to reach a new deal, lawmakers said Mayor Kirk Caldwell needs to be more transparent with the massive project's finances.

"Part of the reason it ended up in this situation, of course, is the city never gave us good numbers ... numbers we could trust, numbers we could work with," said state Sen. J. Kalani English, whose district includes Hana.

Caldwell wouldn't speculate about what would happen if a special session doesn't materialize.

He said he's focused on allowing lawmakers a cooling off period before they return for talks.

"The funds from the federal government, we're not going to get anymore until we have a recovery plan that's approved. Now, we have money that they have provided to us previously and we're spending that money," Caldwell told Hawaii News Now.

He added that if no funding plan is agreed to, and with no new funds coming in, the city could run out of money for construction as early as this summer.

"By the end of the year for sure, we wouldn't have sufficient money just with the GET coming in to continue to pay the contracts for the parts of the project that we are already building," he said.

The city has backed the 10-year extension of the existing percent general excise tax surcharge to cover a $1 billion shortfall for rail.

After much debate, the Senate got on board with that plan, but the House would not agree to what many representatives considered a long-term bailout. Instead, they wanted to increase the state's hotel room tax to help cover rail's shortfall.

The infighting between the chambers and the inability for lawmakers to come up with a funding solution has already led to some major changes in leadership at the state Capitol.

Senate Ways and Means Chair Jill Tokuda learned Wednesday she would be ousted from her powerful committee position, and Souki resigned Thursday.

Tokuda had negotiated the deal with the House to use the hotel room tax but that was rejected by her colleagues.

Speaking on the Senate floor Thursday, Tokuda said, "While my time as chair has clearly ended and this sun has set ... this isn't the end. This is clearly just the beginning."

Meanwhile, the federal government is scrutinizing the rail project -- and the legislative wrangling isn't expected to foster much confidence in those concerned that the project's costs will continue to balloon.

Last week, the city filed its much-anticipated recovery plan with the Federal Transit Administration, reinforcing its goal to complete the 20-mile project to Ala Moana Center.

The recovery plan was required by the FTA after the project's costs soared from $5.8 billion to $8.2 billion. Including financing costs, the project is estimated to cost as much as $10 billion.

The rail's current budget is about $6.8 billion.

In the recovery plan, rail officials say building the project to its current budget, or Plan B, will get the project as far as Aloha Tower. This Plan B, however, could result in a 37 percent to 60 percent reduction in ridership.

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