Despite opportunities to raise the issues earlier, state officials did not question until last week what alternatives city officials studied before deciding to build an elevated heavy-rail commuter line.

The state also did not question whether the city's financial plan for the $5.5 billion project was feasible, according to comments on the project's environmental impact statement submitted by state agencies before a Feb. 6, 2009, deadline.

Now the state plans to probe both questions — a review that could delay an ambitious city plan to begin construction on the 20-mile, East Kapolei to Ala Moana train in January or February.

Gov. Linda Lingle last week said she will conduct a thorough review of both issues before deciding whether the project's final environmental impact statement is acceptable to the state. The announcement surprised city officials, who felt such issues already were settled.

A substantial review would amount to an unnecessary re-review of an analysis already conducted by various state agencies, said city spokes-man Bill Brennan.

"That's what the (environmental impact statement) process is — us working with them to address concerns that have been identified," Brennan said. "The concerns that she mentions don't seem to be the ones that her agencies are raising."

State officials have known since late 2006 that the city would not analyze the costs and environmental impacts of a light-rail, street-level train. However, they failed, until now, to question whether the city adequately explored alternatives to the elevated commuter rail. The project's environmental review process, which the state participates in, started more than a year ago.

Lingle's statement last week comes days or weeks before she's expected to receive the final environmental impact statement for the project. Her signature is required for the EIS to be released and the project to move forward. City officials hope to break ground about five weeks after the final environmental impact study is released.

TAX TAKE DROPS

Lingle, speaking Monday on the Mike Buck radio show on KHVH, said the need for a thorough review is partially prompted by lower tax collections resulting from the economic downturn. Tax collections needed to build Honolulu's planned elevated rail transit line have been declining.

The transit tax raised a net $8.9 million for the city in October, which was down 30 percent from a year earlier. Through the first four months of the fiscal year, transit tax collections are down nearly 6 percent from the year-ago period to $52 million, based on figures provided by the state Department of Taxation.

The drop in tax collections provides a reason for city officials to look at potentially cheaper at-grade rail options, Lingle said.

"There has to be a weighing of factors here," she said. "If an above-grade system, heavy rail, costs $5.5 billion, and tax revenues have plunged 30 percent in this past October they're going to have to look at alternatives, just the way every other entity has to look at alternatives since the financial crisis.

"You can't continue on a path when the revenues simply wouldn't be there anymore."

If the city's transit tax collections don't meet expectations and the costs remain the same, the added burden could fall on taxpayers via an increase in state or county taxes. However, at this point, the city does not anticipate having to deal with a shortfall. That's because it expects lower transit tax collections to be offset by lower construction costs and a future economic rebound.

It's unclear whether Lingle's concerns also are partially driven by the March shutdown of the Hawaii Superferry service. That project initially sidestepped the required environmental impact study only to be halted by the courts.

STUDY COMPLETED

The city has done an environmental impact study for the train. However, several groups — including the U.S. Environmental Protection Agency, Kamehameha Schools and the American Institute of Architects — have expressed concerns that it was inadequate.

Part of the concern is whether the city adequately explored options such as an at-grade train system, or managed, elevated highway lanes. The last time the city studied the viability of a ground-level train through Honolulu's urban core was in 1998. Lingle and others have said the 1998 study is outdated.

Lingle also said she wants assurances concerning how much money the federal government will provide the city to help pay for the train. The city is counting on $1.55 billion in federal funds. However, the federal government isn't expected to announce how much money it will give the city until spring 2011.

City spokesman Brennan questioned whether it's appropriate for the state to review a city financial plan that's already been vetted by the federal government.

The governor's role now is "not a review (of) our finances or whether alternatives (were explored)," he said. "It's (to determine) are we complying with state environmental law?"

"We're trying to do it by the book," Brennan added. "We shouldn't be faulted for anything, I don't think, at this point, (because) we are doing an" environmental impact study, he said.

City officials did not respond to questions about what would happen if Lingle does not sign the environmental impact statement. However, the city already has approved spending $300,000 to fight off potential legal challenges to the project.

AGENCIES RESPONDED

More than a half dozen state agencies submitted comments and concerns about the city's environmental impact study last spring. But the comments submitted did not expressly question whether the city's financial plan was feasible, or why a street-level train was not more rigorously explored.

Neither Linda Smith, Lingle's senior policy adviser, nor Russell Pang, spokes-man for the governor, responded to requests for comment.

State transportation Director Brennon Morioka said comments submitted by state agencies were limited to addressing how the train would affect each agency. The governor's job is to look at the broader implications of the project, he said.

As a result, DOT's concerns focused mainly on mitigating impacts on Hono-lulu International Airport property and state highways.

"Our comments from the agencies are more of a technical nature and (concern) the impacts to our facilities," Morioka said. "She wants to make sure she knows fully what she's signing off on, and what the comfort level is that they met all the requirements for the environmental review. She just wants to do her own due diligence.

"We all know there's a very good possibility of the rail project being taken to court, so I think the more credibility the document has, the better chance it has in standing up in a court of law."