Posted on: Tuesday, February 25, 2003

Spending cut could hinder light rail transit

By Mike Leidemann
Advertiser Transportation Writer

Plans to develop a light rail system on O'ahu could be hindered by a Bush administration proposal to limit federal matching money for mass transit, officials said yesterday.

Under the proposal, the federal government would cover no more than half of a local community's mass transit construction costs. Currently, the government pays for up to 80 percent of mass transit projects.

The proposal would not affect the city's development of a bus rapid transit project, but it would limit financing if officials choose to build a more expensive rail system in the future.

"If they went ahead with that, it could have a huge impact on our thinking," said Senate President Robert Bunda, who earlier this year introduced a bill calling for study of a rail transit system on O'ahu. "If they go to 50-50 funding, we'd get clobbered. I don't know if we could afford that."

The change is designed to spread more federal money around for more transit projects, which would be good news if Hawai'i has to compete for the money with more than 120 other communities developing mass transit projects, officials say.

On the other hand, it means Hawai'i residents would have to pay a higher share of any future mass-transit project, almost certainly requiring a tax increase or other revenue-generating methods to pay for it.

"It's not necessarily good or bad. It's just the way it is," said Cheryl Soon, city director of transportation services. "It's just an issue we have to deal with."

In 1992, the City Council, on a 5-4 vote, killed a proposal for a 0.5 percentage point increase in the state excise tax on O'ahu that would have covered the local share of a proposed $1.7 billion light rail plan backed by former Mayor Frank Fasi.

City transportation officials then decided to move forward with a less expensive bus rapid transit project, which would not require additional local taxes.

The BRT project set to begin operation in 2005 would not be hurt by the change because it already calls for only 50 percent federal financing, Soon said.

"The government's already been operating under a de facto 50-50 system for several years," Soon said. "This is just formalizing the direction they've been taking."

The change would have the biggest impact on cities that have been planning large-scale mass transit projects under the assumption that they would receive 80 percent federal financing.

Forcing those communities to pay at least half of the cost would not be fair, considering some projects have been in the works for years and were undertaken assuming existing federal aid formulas, said William Millar, president of the American Public Transportation Association.

Others are worried that the change would cause some cities to turn away from mass-transit programs and spend their money instead on more highway projects, which still would receive 80 percent federal financing.

"We think that's a strong disincentive to consider transit," Millar said. "I can't name you a single place that will tell you it's a good policy."

State Rep. Kirk Caldwell, who introduced a bill calling for state, city and federal officials to look into developing a fixed-rail system on O'ahu, said the change in policy should not disrupt planning efforts.

"All we want to do at this point is get together to talk about what kind of system we want, how we would finance it and where it would go," said Caldwell, D-24th (Manoa). "We need to let the discussion begin and take a very long-term view. We can make decisions about funding later. If you don't get the talk going, it will never get anywhere."

The formula change is the most controversial of several changes woven into the administration's $7.2 billion package for transit programs nationwide next year. It's the first installment of a six-year program that could transform the way Washington parcels out aid for public transit by increasing aid to rural areas and expanding the types of projects eligible for federal assistance.

Gannett News Service contributed to this report.