COMMENTARY
Reduce rail burden on Oahu's taxpayers
By Romy M. Cachola
A recent article in The Honolulu Advertiser reported that general excise tax collections are down compared with last year's totals because of the bad economy and declining visitor arrivals.
Funding for the city's 20-mile minimum operable segment of rail has always been a major concern for me.
The half-percent GET collection for rail for the first 20 months was $246 million. If averaged out over the 15 years of collection, the total GET would be about $2.2 billion, which falls short of the overly optimistic $4.1 billion in GET surcharge revenues estimated in the draft environmental impact statement.
The following are other reasons for concern:
I stated early on that we can expect one or more of the following proposals if our construction cost estimates are off:
It seems that the administration's plan to fast-track the first segment of the project using collected GET funds is coupled with the notion that once construction begins there will be no stopping. This may explain why the administration is hinting at floating bonds sooner rather than later to make up for the shortage. If we are forced to borrow money, as I suspect we will be, the debt service will be an added strain on taxpayers.
Instead, I strongly suggest, if at all possible, that the city fast-track its application to secure a FFGA with the Federal Transit Administration before starting construction.
The benefits of an FFGA are that it:
An FFGA will result in better predictability and transparency and hopefully prevent cost overruns and delays of the project. Also, an FFGA will give our taxpayers peace of mind and comfort in knowing that they won't be saddled with the burden of repaying long-term debt through borrowing. We would further save taxpayers' money if the more affordable Salt Lake Boulevard alignment, which has a solid ridership base, is selected.
The City Council and administration need to keep taxpayers' best interests in mind for this multi-billion-dollar project. A successful project is one that will not only encourage commuters to leave their cars at home but also won't bankrupt our taxpayers' pocketbooks.
Romy M. Cachola is the councilman for Council District VII (Salt Lake, Halawa, Mapunapuna). He wrote this commentary for The Advertiser.
