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The Honolulu Advertiser
Posted on: Friday, December 5, 2003

State receives insight on light-rail financing

By Mike Leidemann
Advertiser Transportation Writer

Hawai'i could tap into new, creative federal financing programs to get its proposed $2.6 billion light-rail project operational sooner than expected, federal officials told state leaders yesterday.

The programs, including selling development rights around stations and short-term borrowing against future federal grants, are being encouraged by the government as a way to spur transit development across the country, said Jennifer Mayer, a U.S. Department of Transportation finance specialist who briefed members of the governor's task force on transportation yesterday.

"The trend is to assist states to finance their projects in creative ways that help get the projects built," Mayer said.

Gov. Linda Lingle said officials heard details on several projects, including the way Dallas used short-term borrowing to get its new rapid transit system built in just five years before receiving any federal money.

Although financially risky, the plan has the advantage of getting the system running quickly rather than slogging through long political debates before work begins.

Hawai'i officials earlier said it could be 2016 before a light-rail system running from Kapolei to Iwilei becomes operational using a traditional 50-50 mix of federal grants and local financing.

Lingle said task force members yesterday did not discuss local financing options.

"There's no tremendous rush to do that," she said.

Nestor Garcia, chairman of the City Council's Transportation Committee, said local government officials will discuss proposals to seek an increase in the state excise tax at a conference in Kona this weekend.

Lingle earlier said she would seek legislative action allowing counties to increase the excise tax to pay for special projects, including the Honolulu rail proposal.

Garcia said he will insist that any increase be open-ended so that extra money could pay for operation and maintenance expenses of the rail system, not just construction costs.

Although it was good for local officials to hear about federal financing options yesterday, completion of the project will depend on local financing, Garcia said.

"It's all going to come down to the political will to do it," he said.

Reach Mike Leidemann at mleidemann@honoluluadvertiser.com or 525-5460.