One factor that greatly erodes confidence in the $5.5 billion O’ahu rail project is the annual attempt of the Legislature to raid funds from the half-cent excise tax enacted by the city to pay for the train.
This year, senators are proposing to “borrow” $200 million from the rail fund to enable them to balance the state’s budget while ducking the tough decisions to get their own financial house in order.
The state is already skimming 10 percent off the top of the transit tax — potentially $400 million over the life of the tax — to pay for nonexistent “administrative costs.” This unnecessarily runs up the cost to O’ahu taxpayers for Hawai‘i’s most expensive public works project by 10 percent right off the bat.
In Mayor Peter Carlisle’s first appearance before the Legislature, he wimpishly let Maui Sen. J. Kalani English extract a promise from him not to try to get the 10 percent back.
It’s no wonder English is so protective of the state’s share of the transit levy; it essentially forces O’ahu taxpayers to subsidize his Maui constituents by paying a 4.5 percent excise tax for some state services while neighbor islanders pay only 4 percent.
The concern is that instead of tightly watching expenses on this enormously costly project to keep it from growing out of control, it’s being treated by lawmakers like a giant slush fund that could turn into the biggest orgy of profiteering Hawai‘i has ever seen.
There is no longer any reasonable doubt that the combination of the city’s excise tax plus whatever federal share emerges from a cost-cutting Congress won’t be enough to build the 20-mile commuter line, much less cover the operating costs.
That city leaders refuse to say how they’ll make up the difference — and that the Legislature and Abercrombie administration shamelessly skim instead of holding the city’s feet to the fire — should make us all very nervous.