Special session to tackle rail funding

June 20, 2017

Honolulu Star-Advertiser
By Kevin Dayton
June 20, 2017

Lawmakers haven’t yet agreed on the details, but leaders in the state House and Senate announced Monday that they plan to hold a special session this summer to try to resolve their impasse over how to provide more funding for the city’s 20-mile rail project.

Senate President Ron Kouchi and House Speaker Scott Saiki sent a joint letter to Federal Transit Administration Executive Director Matt Welbes on Monday promising to convene the special session in July or August.

They said no specific dates have been set for the session and no funding mechanism has been agreed upon.

“After working with members of our federal delegation, it was deemed necessary and prudent to assure the FTA that the Legislature recognizes and understands the requirements under the Full Funding Grant Agreement between the City and County of Honolulu and the FTA,” according to a statement from Kouchi and Saiki.

Lawmakers were divided over how to fund the city’s rail project, which is vastly over-budget and is now expected to cost about $10 billion, including interest. The FTA has pledged to provide $1.55 billion in federal funding for the project.

Mayor Kirk Caldwell this year asked lawmakers to extend the half-percent general excise tax surcharge that is now scheduled to end in 2027 to bail out the project, but lawmakers could not agree on a bill to provide more funding for rail during the regular legislative session that ended on May 4.

Caldwell has said he plans to press lawmakers for a new rail funding agreement that could be ratified in the special session.

The rail issue dominated the entire legislative session, but the House and Senate deadlocked over whether to extend the half-percent excise surcharge on Oahu for rail as the city requested, or try another approach to fund rail that involved an increase in the state’s hotel room tax.

Lawmakers and Gov. David Ige have said there is little point in holding a special session until lawmakers have reached an agreement on how to continue funding rail, so the timing for the session likely will depend on lawmakers’ private negotiations over the rail issue.

Saiki told reporters at the state Capitol on Monday that those negotiations are ongoing and that lawmakers need to figure out how to cover a $1.384 billion shortfall that exists between now and 2024. He said that figure reflected the latest estimate from the Honolulu Authority for Rapid Transportation, which is managing the project. The figure is slightly higher than what the agency provided lawmakers with during this past legislative session.

While state lawmakers are feeling political pressure to solve the rail funding quagmire, Saiki made clear that responsibility for the project ultimately rests with the city.

“Rail is a city project — it is not a state project — and it is the city’s responsibility to provide the financing to complete this project,” said Saiki.

Still, Saiki said he’s in agreement with Kouchi that the issue needs to be resolved. “So we are making it a priority this summer,” he said.

U.S. Sen. Brian Schatz and U.S. Rep. Colleen Hanabusa, who formerly led HART’s board, both released statements applauding the Legislature’s commitment to holding a special session.

“It is important that state and local governments continue to work together to ensure funding obligations under the full funding agreement will be met so that work on rail will be completed as agreed,” said Schatz. “I will continue my efforts to ensure that FTA understands our commitment to this critical project.”