Feds offer options
to fund rail

Councilman Garcia says
the system would require a
permanent tax hike in the end

The city will not be able to maintain and operate a rail transit system without a dedicated, perpetual tax, said City Councilman Nestor Garcia.

"That's what I came away with from this meeting," said Garcia after a meeting yesterday with federal highways officials who presented members of Gov. Linda Lingle's transportation task force funding options to build the system.

City, state and federal officials are part of the task force that is proposing a light-rail line from Kapolei to Iwilei and elevated or "flyover" car lanes above Nimitz Highway that will eventually become part of the rail line into downtown Honolulu.

Garcia is the City Council's Transportation Committee chairman.

Earlier this week, Lingle backed off her push to give the counties new taxation powers to pay for mass transit after she failed to gain support from fellow Republicans. She said there is no immediate need for large amounts of money since the project is still in its environmental planning stage.

"I did report to the committee that our portion, the state portion of the project, the Nimitz flyover, is proceeding, and we are working to finalize that environmental impact statement and we hope to get that project in line for the next round of (federal) highway funding," Lingle said.

The light-rail system is expected to cost $2.6 billion. The estimated cost of the flyover is $200 million to $250 million.

"What we brought to the table (yesterday) is innovative financing mechanisms available out there that this project can meet," said Thay Bishop, from the Federal Highway Administration Resource Center in Atlanta.

The options discussed include selling development rights along the system's route and getting private short-term financing to build the system, then seeking voter support to refinance the debt through a public bond issue after the system is completed. Lingle described the second option, which was done in Dallas, as "risky."

In 1991 the state Legislature gave the counties the option for 10 years of raising the excise tax 0.5 percentage points for a transit system.

The City Council rejected that option in 1992 by a vote of 5-4, killing a proposed heavy-rail project.

"What I would propose as transportation chairman is that we have no drop-dead provision," Garcia said. "Revenue in perpetuity."

The tax would be needed to help pay for running and the upkeep of the system, Garcia said.


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