Don’t miss the stories on the rail negotiations by Star-Advertiser reporter Gordon Pang and Kevin Dayton. They’ve captured the tension as Honolulu Mayor Kirk Caldwell and city officials attempt to make the problem of paying for rail a state problem.
Pang reports on a Wednesday night meeting during which details of the proposal agreed to by legislative leaders were disclosed to the city.
Caldwell was summoned to Senate President Ron Kouchi’s office Wednesday evening to discuss the proposal.
At the meeting, House Finance Chairwoman Sylvia Luke asked him to accept the terms and conditions of the package, the mayor said.
He took that to mean that there was no room for negotiation, that state lawmakers were offering a “take-it-or-leave-it” proposition, the mayor said.
Caldwell responded that he would need to take the proposal back to be analyzed by financial officers in both the Department of Budget and Fiscal Services and the Honolulu Authority of Rapid Transportation.
Tempers flared, and after some yelling, Caldwell said, he and Gary Kurokawa, his chief of staff, walked out of the room abruptly.
“It ended up with me and (Kurokawa) leaving after, what, an hour and a half?” Caldwell said. “But it ended with one of the members, I think who had maybe drank a little too much, was getting belligerent. And I listened for a while, and then I said, ‘I don’t need to take this.’”
Caldwell declined to identify the lawmaker.
And Kevin Dayton reports on Caldwell’s response to the proposal, contained in a letter to lawmakers on Thursday.
Even after that extra funding is provided, “by our calculations, the gap is somewhere between $600 million and $900 million,” Caldwell wrote. “To fund the gap with city operating revenue would place an enormous financial burden on the residents and taxpayers of Oahu well beyond what a straight forward extension of the (general excise surcharge) would do.”
Well, isn’t that something that Caldwell should have figured out years ago, either while serving as managing director or as mayor? It seems belated recognition that the city can’t really afford the rail system, but has at the same time refused to consider modifications that have the potential to cut those costs significantly.
Senator Laura Thielen took to her Facebook page to vent about Caldwell’s attitude.
The nerve of this man! Last week at the briefing I asked Mayor Caldwell 3 times if he was going to ask for more money for Rail if costs went up. Three times he said he stood by the City’s projected $8.2 Billion construction costs.
He was so angry at our questions that he walked out of the hearing early and didn’t come back.
Today he sent us a letter saying the Legislature has to give an extra $545 million. And if we don’t, then WE’RE not adequately supporting the project.So today it’s $8.7 billion and we have yet to see the bids for the most expensive section of Rail, downtown.
No trust. No credibility. No shame. Outrageous!
Why are we holding a special session for this man and his project that he refuses to manage?
Meanwhile, my Civil Beat column for the week appeared yesterday, “Ian Lind: Don’t Be Fooled By ‘Friends Of Rail’“.
After last week’s release of a new survey by a new “grassroots” group, Friends of Rail, part of a broader pro-rail public relations push launched by the group, I got curious about the groups status and composition.
It looks like rail proponents have what is essentially took an inactive “shell” nonprofit corporation, Committee for Balanced Transportation, and resurrected it with new directors and a new trade name.
While working on the column, I was unable to reach Ryan Akamine, who is the president and a director of the Committee for Balanced Transportation. I did reach a former director of the group who identified himself as a personal friend of Akamine, and who agreed to forward my request to speak with him. I did not get a response.
I was able to find more information, but not in time to include it in the column. Akamine is a former staffer for now-Senator Stanley Chang, back when Chang sat on the Honolulu City Council. In 2015 testimony, Akamine said he now offers “equity investments, tax, and accounting services through GENIUSfiIe, L.P., and Boeckmann CPAs, in Honolulu, Maui, and Kauai.”
Another former Stanley Chang staffer, Rebecca Soon, responded to my inquiry emailed to Friends of Rail this week, as I described in the column.
In any case, the Civil Beat column is no longer behind a pay wall.
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“Make rail a state problem”. Not on the cities part. The only reason it goes through the state is because the only taxes allowed are property and gas taxes under the state constitution. The legislature allowed the city the 0.01 GET, The City in turn adopted an 0.005 rate. The issue really is simply allowing that rate to continue for 10 years. The leg, under pressure from anti tax groups is proposing the state wide tax. It is quite evident that the city and residents can afford the 1/2 cent rate, since they, tourists, and military personnel have been paying it for years, with no outcry, and a booming economy. So the county can afford rail. It can afford rail with a property tax rise too. Honolulu’s property tax rate is the lowest in the nation. 35 cents per $100 on below million $ properties; 65 cents above; $1.25 for hotels. In LA residential rates are $1.41, Cleveland $2.10. A property tax rise would actually lower home prices.
Since the City hasn’t been able to get much of a handle on rail’s costs to date, why can we assume they can go down Dillingham Boulevard and through downtown at current cost assumptions? The final price tag remains elusive. Let’s hope the City & County doesn’t go the way of Stockton.
Raising the TAT is a good thing. Too many tourists.
Trifecta:
1) GE Tax Hike Extension (in SB1)
2) TAT Hike (in SB1)
3) Property Tax Hike (Caldwell says will be necessary)
Stop the monster at Middle Street.
“Raising the TAT is a good thing. Too many tourists.”
The tourists that likely bug you the most are staying in TVRs — and they don’t pay TAT because TVRs are mostly illegal.
Mayor Palaka is grasping at straws. He knows that his name will be forever tied to Mufi’s Folly and his political career is on life support.
If he does have another 1/2% on the GET, it should put it in place and stop blaming the State. He’s lucky to get anything from them other than reduction in the 10% skim, which was outrageous to begin with.
The reason legislators have heartburn about allowing Honolulu County to raise the GET is because the State needs to hold on to the option of raising it in the future for their own needs, such as for the severely underfunded government workers pension fund, EUTF health benefits, and government employee raises. Hence going to the TAT, to keep some dry powder for their own GET needs.
A correction about the “rising cost” of rail: until the final leg is out for bid and then awarded, the projected cost is going to be subject to change.
Once that final leg is awarded, there will be more certainty about rail cost projections. Holding costs down at that point becomes more about managing changes and unexpected problems or delay in actual construction.
The farther the award gets pushed into the future, the higher the costs are likely to be. And if the funding for rail involves more loan money with interest at whatever the rate happens to be at the time, then yes, costs could go higher.
BTW, I believe most state lawmakers are at least this knowledgeable about how cost projections work, how bids work, how financing works, and how construction costs typically go up over time.
It is apparent from some of the questions and statements from lawmakers that there is a lot of political grandstanding that does not come anywhere close to helping the public understand the process of actually building and paying for big (and very important) infrastructure.
The drama is unnecessary and mostly not helpful. What I am not seeing is true leadership (from Ige? or Democratic Party?) and a message about working together to address problems.