Is Rail Already Hurting Hawaii’s Economy?

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Honolulu rail transit cartoon
Dark cloud of growing public doubts cast shadow on Honolulu rail.

BY JOSEPH DEMARCO – Taxpayers, or should I say the City & County of Honolulu, are planning to spend billions of dollars on an elevated steel on steel rail line, and here’s the clincher, most of that money is going out of state.

“Common sense alone tells you that removing billions from the private sector will have a significant adverse impact on the local economy,” said Cliff Slater, a transportation expert against the rail plan. Honolulu Mayor Peter Carlisle has dubbed Slater one of “The Gang of Four,” which also includes University of Law Professor Randall Roth, Former Governor Benjamin Cayetano and Retired Judge Walter Heen.


They’ve joined other community and environmental leaders in filing a lawsuit challenging the adequacy of the city’s Environmental Impact Statement.

What is even more troubling according to the “Gang of Four,” is there will only be 350 construction jobs. Should we say that again, just to let it sink in, $5.3 billion spent for 350 construction jobs. The $483 million construction contract for rail went to Kiewit, which said it needed 350 workers to build the first segment.

The same workers would probably end up building the remaining segments, because the plan is to build the system in segments, not all at once.

Another billion or so goes to Ansaldo, an Italian company which has said it will only create 300 local jobs. The city initially claimed that rail would create 17,000 new jobs during the construction phase, but later lowered its estimate to 10,000.

That was what former Honolulu Mayor Mufi Hannemann said, when he sold all of us this steel-on-steel rail with 52 percent of the popular vote.

The excise tax which has collected $460 million so far is actually costing the state jobs. Since the economy is so bad, the extra excise tax is hurting the market. People are finding that their budget doesn’t go as far so they’re cutting back. What that means is some businesses don’t get that money.

If you want to look at the jobs created by the rail project, you should subtract out the jobs that have been lost from the effect of the excise tax.