Feds could withhold construction funds if rail has no financial solution by July

HONOLULU (HawaiiNewsNow) - If there is no agreement to fund the Honolulu rail transit project in place by July, federal funds meant to be put toward its construction will continue to be withheld by the U.S. government, according to testimony by rail officials during a Honolulu City Council meeting on Wednesday.

HART's interim director, Krishniah Murthy, told councilmembers during the meeting that he recently had to ask the Federal Transit Administration for an extension to come up with a new plan to pay for the system.

"They did not say no to our request, that we will submit our financial plans after all of the legislative actions, so I will assume that they will give us that time," Murthy said.

Costs for the rail project have nearly doubled, to $10 billion, since the project began.

When HART filed a recovery plan with the administration last month, they left out the portion that included financial information, electing to wait until state lawmakers had approved a solution.

The FTA has withheld rail funds in the past; in 2015, the agency decided to keep $250 million until a .5-percent tax extension was approved by the City Council.

During Wednesday's meeting, the council also squashed discussion – for now – on plans to use increased property taxes to pay for rail construction.

Councilmembers decided to defer the measure until state legislators can hold a special session to decide how to fund the project – either by extending the general excise tax or increasing the transient accomodations tax.

If neither measure passes, the city says it would need to raise property taxes by 13 to 15 percent in order to afford rail construction.

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