Light-rail money long-term issue

By Mike Leidemann
Advertiser Transportation Writer

The $2.64 billion light rail system proposed for O'ahu would be the biggest public works project ever undertaken in the state. Finding and keeping money for it are likely to be among the biggest challenges for local lawmakers in the next decade, officials said yesterday.

"We need to build that consensus in the public as well as in elected officials, so that whoever is in charge in the future can follow through on what we're starting now," said City Councilman Donovan Dela Cruz, whose district includes much of the area that the proposed Kapolei-to-Iwilei line will serve.

Gov. Linda Lingle said it is important that residents understand as soon as possible that the rail project will require some sort of tax increase.

"This is not an issue that we have to face immediately," she said, "but we felt it was a sign of good faith and clearly as an understanding of what it would take to bring this off, that we make clear to the public at a very early stage that eventually if the public believes that this is something we should do as a city, as an island, that there will be some sort of a tax increase."

U.S. Rep. Ed Case said federal money will be available for the project, but it's unclear if the government will put up 50 percent or 80 percent of the total cost. That decision could rest on what Congress does with a transportation financing bill that it plans to consider early next year, he said.

Officials who have developed the initial plans under a task force brought together by Lingle said no decision has been reached on how to pay for the local share of the project, but at least half of the possibilities raised include some sort of new taxes or fees on transportation users, including raising the fuel tax or increasing fees on motor vehicle registrations.

None of those ideas are likely to be popular with voters, especially residents who will not directly benefit from the rail system.

Slightly more than half of the people who responded to an unscientific online survey at HonoluluAdvertiser.com yesterday said they would be opposed to paying more taxes for the rail project. More than 1,600 people had participated in the survey by yesterday evening.

"If my state tax money is being used to finance this rail system on O'ahu, what benefit is it to me?" asked Hilo resident Charles Langer.

Others questioned the value of the project if it doesn't run through urban Honolulu, or extend to Central O'ahu or the Leeward Coast.

"Rail transit never made it in the past because there were serious doubts about whether it would reduce traffic congestion, and if so, whether the cost of building and operating the system would be a worthwhile tradeoff for sucking funds from other needs, such as education," said former Gov. Ben Cayetano.

Cayetano noted that raising gasoline taxes for rail transit would come at the expense of other O'ahu transportation projects, and increasing the excise tax had been strongly opposed by businesses in the past.

An even bigger problem, Cayetano said, will be finding money to keep the system running once it is built. "It is the operating and maintenance costs everyone should be wary about," he said. Preliminary estimates are the system will cost $22 million a year to run.

Ann Kobayashi, City Council Budget Committee chairwoman, said officials need to identify a financial plan as soon as possible and stick to it.

"The sooner we lock things in, the better," she said. "It's better to tinker at the beginning than to try to change things later.

"Once we know how we're going to pay for it, there's no question about continuing to move forward."

Kobayashi said the city should investigate public-private partnerships in building the rail system. One idea might be selling development rights for areas or renting out retail spaces around rail stations, she said.

Dela Cruz said a public wary of spending so much money to benefit one part of the island should be reminded that the rail line could be extended to other areas later.

The concern about future money is heightened because twice before the city has developed extensive plans for rail transit in Honolulu, only to have them scuttled by shifting political and economic winds.

In the most recent case, city officials worked for years on a rapid transit line that would have gone between Leeward Community College and the University of Hawai'i-Manoa. That plan ended in 1992, when the City Council voted 5-4 against raising the state excise tax 0.5 percent on O'ahu to pay for the local share of the project.

After that, the Federal Transit Administration, which had set aside $700 million for the project, changed its rules so that no other transit proposals nationwide could be approved before local money was set in stone. The change has been known ever since as "the Honolulu amendment," local transportation officials said.

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