Honolulu Rail Transit

OCTOBER 9, 2018

Honolulu’s Transit Rail Was Estimated To Cost An Enormous $9.5 Billion, A Cost That Made This Project One Of The Most “Expensive Per Capita In The United States”

 

A Train Track Meant To Operate Throughout Honolulu Was Estimated To Be A $9.5 Billion Project, Which Made This Project One Of The Most “Expensive Per Capita In The United States.” “Train tracks supported by concrete pillars snake through Oahu neighborhoods and across its lush scenery, ending abruptly in an empty, overgrown field. They’re part of a planned $9.5 billion rail transit project – one of the most expensive per capita in the United States. But the commuter line, in the works in and around Honolulu for more than a decade, is less than halfway complete and facing a budget shortfall of up to $3 billion.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

The Cost Of The Rail Amounted To “Nearly $10,000 Per Person” Which Was “Thousands More Than Other U.S. Rail Lines.” “But the Honolulu project stands out because of spiraling costs that have pushed its price tag to nearly $10,000 per person, thousands more than other U.S. rail lines. The proposed 20-mile (32-kilometer) route stretches from suburbs west of Honolulu into downtown and stops short of the tourist mecca Waikiki.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

However By 2017, Hawaii Faced A Larger Issue Of How To Continue The Project As It Was Announced That There Was A $3 Billion Gap In Funding

By 2017, The Commuter Line Was Already At A Budget Shortfall Of $3 Billion And State Lawmakers Were On A Deadline To Figure Out How To Make Up For The Cost. “But the commuter line, in the works in and around Honolulu for more than a decade, is less than halfway complete and facing a budget shortfall of up to $3 billion. If lawmakers don’t agree on how to fill it, the giant columns could end up as nothing more than expensive eyesores. Hawaii lawmakers are convening in a special session Monday after failing to plug the funding gap earlier this year.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

  • That Same Year State Legislative Leaders Faced A Budget Deadline Of How To Gain Billions In Funding Or Potentially Face An $800 Million Charge From The Federal Government With More Funding Potentially Withheld. “Legislative leaders have tentatively agreed to a bill, but whether it will pass is unclear. If no solution is found by Sept. 15, the federal government could demand that Honolulu return more than $800 million it has already spent and withhold the rest of a promised $1.5 billion funding package.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

Additionally If The State Legislature Did Not Fund The Shortfall, Then The City Estimated That It Would Have To Increase Property Taxes By 12 To 15 Percent. “If the Legislature doesn't fund the shortfall, the city estimates that it would have to increase property taxes by 12 to 15 percent.” (Rick Daysog, “City Council Passes On Raising Property Taxes To Fund Rail – For Now,” Hawaii News Now, 5/11/17)

 

  • However, The Honolulu City Council Deferred Action On Using Property Taxes To Fund The Construction Of The Rail Project. “The Honolulu City Council deferred action on a measure to use real property taxes to fund the construction of the rail project, whose costs have nearly doubled to $10 billion.” (Rick Daysog, “City Council Passes On Raising Property Taxes To Fund Rail – For Now,” Hawaii News Now, 5/11/17)

 

To Help Fix The Spending Gap, Hawaii Was Expected To Raise The General Excise Tax And The State’s Hotel Tax, Actions That Received Criticism Among Members In The Community

By September 2017, The Governor Of Hawaii David Ige Signed A Bill That Would Provide Additional Funding For the Rail Project. “Hawaii Gov. David Ige is signing a bill that provides additional funding for Honolulu's financially troubled rail transit project.”’ (“Hawaii Governor Signs Rail Funding Bill Into Law,” The Associated Press, 9/5/17)

 

One Aspect Of The New Law Would Raise $2.4 Billion By Raising The Surcharge On The General Excise Tax And Raise The State’s Hotel Tax. “The new law raises $2.4 billion in taxes by extending Oahu's surcharge on the general excise tax and by raising the state's hotel tax.” (“Hawaii Governor Signs Rail Funding Bill Into Law,” The Associated Press, 9/5/17)

 

The General ExciseTax Would Potentially Be Passed Onto Customers Who Would Bear The Burden Of The Cost. “The general excise tax, currently about 4.5 percent on Oahu, is essentially a business income tax that’s often passed on to customers.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

Additionally Tourism Advocates Were Against An Increase In A The State’s Hotel Tax Because Tourists “May Think Twice Before Traveling To Hawaii” Because “Hawaii’s Room Tax Is Already One Of The Highest In The Country.” “Lawmakers are talking about boosting the transient accommodation tax or hotel room tax by one percent for 13 years. The current room tax for a room that costs $250 a night is a little more than $23. If the room tax goes up by a percentage point, the price per room will jump about $2.50. Tourism advocates are against the increase, claiming visitors may think twice before traveling to Hawaii. After all, Hawaii's room tax is already one of the highest in the country.” (“Lawmakers Come Up With Plan To Fund Honolulu's Rail Line,” KITV, 8/24/17)

 

Various Transportation Experts Have Even Called Out The Project As Potentially The “Biggest Boondoggle In The Country”

 

Keith Millhouse, A Transportation Consultant And National Expert On Mass Transit Issues, Claimed The Project Was Becoming The “Biggest Boondoggle In The Country.” “‘Right now it’s probably a race between California and Hawaii of who’s going to get their projects built or have the biggest boondoggle in the country,’ said Keith Millhouse, a transportation consultant and national expert on mass transit issues, referring to a $64 billion bullet train planned between Los Angeles and San Francisco. Both projects have faced funding issues and lawsuits.” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

Dan Chatman, Associate Professor Of City And Regional Planning At The University Of California, Claimed That The Capital Cost Was “Way Too High” And The Expected Ridership Was “Way Too Low.” “‘The capital cost is way too high, and the expected ridership is way too low,’ said Dan Chatman, associate professor of city and regional planning at the University of California, Berkeley. ‘It’s pretty simple.’” (“Hawaii Scrambles To Keep Train Project From Going Off Rails,” The Associated Press, 8/26/17)

 

Now The Honolulu Authority For Rapid Transportation May Lose Up To $3.8 Million Federal Reimbursements For Their Potential Violation Of Federal Relocation Law, Forcing Taxpayers To Fund The Million Dollar Mistake

 

Taxpayers In Honolulu May Have To Pay An Additional $3.8 Million On The Honolulu Rail Line If An Investigation Into The Rail Shows That Rail Officials “Overspent Millions Of Dollars.” “Taxpayers may have to come up with an additional $3.8 million to help pay for Honolulu's rail line, if an investigation reveals rail officials overspent millions of dollars.” (Moanike’ala Nabarro, “Taxpayers Might Have To Pay More For Rail If Investigation Reveals Rail Officials Overspent Millions Of Dollars,” KITV, 2/23/18)

 

An Internal Review Of The Honolulu Authority For Rapid Transportation (HART) Found That The Entity May Have “Overspent Millions” On Relocation Costs For Residences And Businesses In The Path Of The Rail Line. “An internal review of the Honolulu Authority for Rapid Transportation's files found it may have overspent millions on relocating residences and businesses in the path of the rail line.” (Moanike’ala Nabarro, “Taxpayers Might Have To Pay More For Rail If Investigation Reveals Rail Officials Overspent Millions Of Dollars,” KITV, 2/23/18)

 

  • HART In A Letter To The Federal Transportation Administration Stated That It “May Have Paid Relocation Expenses In Excess Of What Is Allowable.” “The organization in charge of the city's beleaguered 20-mile rail project sent a letter to the Federal Transportation Administration on Thursday to inform the federal agency about its belief that it ‘may have paid relocation expenses in excess of what is allowable,’ according to the Honolulu-Star Advertiser.” (HJ Mai, “Honolulu Rail Could Give Up $3.8M For Possible Federal Violations,” Pacific Business News Journal, 2/23/18)

 

As Of January 2018, HART Had Spent More Than $13 Million On Relocation Fees, With A Portion Of The Expense Reimbursed By The Federal Transit Authority. “As of January, HART spent more than $13 million on relocation. A portion of that was reimbursed by the Federal Transit Authority.” (Moanike’ala Nabarro, “Taxpayers Might Have To Pay More For Rail If Investigation Reveals Rail Officials Overspent Millions Of Dollars,” KITV, 2/23/18)

 

To Fix This Potential Error HART Has Proposed To Forgo $3.8 Million Of Federal Funding After Potentially Violating The Federal Relocation Law. “The Honolulu Authority for Rapid Transportation has proposed to forgo $3.8 million in future federal reimbursements after potentially violating a federal relocations law.” (HJ Mai, “Honolulu Rail Could Give Up $3.8M For Possible Federal Violations,” Pacific Business News Journal, 2/23/18)