Honolulu De-Railed

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BY MALIA HILL – Greg Wiles of Hawaii Reporter is going to end up winning the unofficial Hawaii Sunshine award for Excellence in Reporting on Hawaii’s Troubling Financial Situation.  It’s tough to be such a consistent bearer of bad news, but (fortunately for the cause of transparency), he hasn’t let up on letting us see just how big a hole the government continues to dig for the taxpayers.  For example, check out this recent article, examining the probability that Congress will cut funding for the Honolulu Rail project.


Let’s go back into the misty past . . . all the way back to the autumn of 2010.  You may recall then that defenders of the Rail Project indignantly responded to critics who worried about the state (and Hawaii’s taxpayers) getting stuck with the tab for an already-stunningly-expensive project that was almost sure to go over-budget.  “No, no!” exclaimed the Rail Supporters.  “The federal government is committed to the project.  It won’t end up being a financial debacle for Hawaii.”  (In my imagination, they also referred to the magic beans that was going to grow a magical money tree to pay for it.)

And now, these many weeks later . . . Congress is considering cutting funding–an incredible surprise for anyone who had picked “one year or more” in the “When will Congress abandon the Rail” office pool.  No, it’s not a settled question yet, and Senator Inouye plans to protest it with all his might, but we’re not off to the best start.  Consider some highlights from the Greg Wiles article:

The House Appropriation Committee has proposed cutting roughly 20 percent of the Honolulu project’s $55 million funding request for fiscal year 2011, according to Congressional sources.

The funding proposal is at this point just that – a measure that still must pass the full House and then an expected showdown with Senate Appropriations Committee headed by Hawaii U.S. Sen. Daniel Inouye. But the proposed measure adds to the questions raised by critics about the project’s finances and how the Republican-controlled House will treat the project in the future.

“The big issue is how much the city is going to get,” said long-time rail foe Cliff Slater.

“I don’t think the city is going to get the $1.5 billion with all the cutting going on.”

The city is counting on getting $1.55 billion from the Federal Transit Administration to help fund the effort.

The recently released White House budget for next year calls proposes $250 million for Honolulu’s rail project.

But first Congress must pass a funding resolution in March to continue government operations through the rest of the federal fiscal year, which ends in September.

The House Appropriations bill was proposed on Feb. 11 and meets a pledge by Republicans to dramatically cut spending by shearing $61 billion from the budget.

. . . .

The House action isn’t the only financing issue for the city, though.

A Hawaii Senate bill proposes raiding funds the city has received from a general excise tax surcharge and repaying the $200 million from general obligation bonds it will issue.

It would also extend the half-percent Oahu surcharge that was enacted to pay for the rail project. It would expire in 2024 instead of 2022, under the bill, SB1426.

Opponent have questioned various aspects of the bill, including whether the proposal represents deficit financing through a bond issue and if it is trying to remedy a short-term budget problem with longer-term financing. Among those raising questions about the bill is the City and County of Honolulu and the Abercrombie administration.

But they also charge the measure could jeopardize how the Federal Transit Administration and Congress fund the project. They say it may also cause delays in the project and said lawmakers should table the bill.

The measure has passed the Senate Public Safety, Government Operations, and Military Affairs committee and will next be heard by Ways and Means.

The project is also facing two lawsuits, one of which challenges how environmental approvals could be given for the project when a complete survey of Native Hawaiian burials hasn’t been completed.