Rooted in Reason: Nurturing the Seeds of Liberty

Dale’s Energy, Transit, Taxes (and More) Update by grassroothawaii
August 12, 2011, 7:53 pm
Filed under: Economy, Hawaii Sunshine, World | Tags: , , , , , , , , , , ,

Today, we have another update for you from Dale of Charley’s Taxi on the latest headlines in transit, taxes, energy, zoning, and more.  Some highlights (or lowlights, depending on how you look at it) from this edition include the questionable relationship between the rail project and the unions, the probability of a “double-dip” recession, an analysis of what causes cities to grow or shrink, and the effort to empirically demonstrate the existence of media bias.  Enjoy:


The bulk of [budget cuts] will have to be found by cutting real military capability and as a result, accepting real additional risk to the country’s security. — Michael E. O’Hanlon, Brookings Institution

“I drank so much vodka I could barely stand up. But I had to get home somehow and decided to do something I had never done before. 

I took a bus.     And here’s the good news. I arrived home safe and sound, cozy and warm, and able to go to work the next morning.  

All of which is remarkable because I had never driven a bus before.” — Henry at AA meeting

The effect of the people’s agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go; with the result that they may all have to make a journey which most of them do not want at all. — F.A. Hayek

The al-Qaeda network is fully prepared to continue the jihad against the American infidels by launching deadly attacks, but your outdated and rusting transportation infrastructure needs to be completely overhauled for those strikes even to be noticed.— Ayman al-Zawahiri

The Debt-Limit Debate: Addressing Key Concerns, Veronique de Rugy, Jason J. Fichtner, Mercatus Center, George Mason University, 5/26/11

The Debt Ceiling: What is at Stake? Vernoique de Rugy, Jason J. Fichtner, MercatusCenter, GMU, 4/28/11

Glimpse into daily life in North KoreaJean H. Lee, David Guttenfelder, MSNBC, 7/23/11

Journey into North Korea, MSNBC PHOTOGRAPHS

The Official 1984 Reagan ScorecardJonathan Rowe, Paul Glastris,Washington Monthly,

How Government Regulation Affects the Price of a New Home, Paul Emrath, National Association of Home Builders, July 2011

Obama Undercuts Case for HSR and Rail Transit, The Antiplanner, 8/04/11

What the Budget Control Act Means for U.S. Defense, Michael E. O’Hanlon, Brookings Institute, 8/02/11

Why Did America Destroy Its Great Cities?, Frank Gruber, Huffington Post, 8/02/11

CBO: Federal Loan Guarantees for the Construction of Nuclear Power Plants, August 2011

Intoxicated on Independence: Is Domestically Produced Ethanol Worth the Cost?,Scientific American, 7/28/11

The U.S. May Need More Lawyers!, Clifford Winston, Robert W. Crandall, Huffington Post, 7/29/11

The Obama EPA’s Brave New Future, Heritage Foundry, 7/28/11

Higher fuel standards mean higher death toll, Washington Examiner EDITORIAL, 7/28/11

When it comes to population growth, Houston is No. 1, Rice University, 7/06/11 

News in Hawaii

CEO of troubled rail car company that won Honolulu bid steps down, Gene Park, Honolulu Star Advertiser, 8/05/11

Inouye, Akaka, Cantwell and Johnson Introduce Bipartisan Bill to Help Facilitate Business Travel, Trade with Asia-Pacific Region, Hawaii Reporter, 8/04/11

‘Sinkhole State:’ Hawaii is in the 47th Worst Financial Position of All 50 States,Hawaii Reporter, 8/03/11

Trains Helped Kill the Greek Economy – They’ll Kill Hawaii’s too, Panos Prevedouros, Fix Oahu, 8/01/11

The New Airline & Air Service Strategy Metrics, Boyd Group International, 8/01/11

American Airlines is dropping SFO-Honolulu this fall.

Honolulu Rail in Illegal Pact with Local Unions, Panos Prevedouros, FixOahu, 7/29/11

Ansaldo Honolulu’s parent firm rethinking rail car business, Gene Park, Honolulu Star Advertiser, 7/29/11

Rail Bid Judges Ignored Ansaldo’s Past Problems, Michael Levine, Honolulu Civil Beat, 7/28/11

New vehicle charging station powers up at Capitol garage, Honolulu Star Advertiser, 7/28/11

Solar Power Plant on Oahu Does not Pass Muster, Panos Prevedouros, Fix Oahu!, 7/27/11

Traffic Accident Investigation on Oahu: Stuck in the 1980s, Panos Prevedouros, FixOahu!, 7/28/11


Brutal: Dow Plunges Amid ‘Double-Dip’ Recession Jitters, Guy Benson, Townhall, 8/04/11

Editorial: An Unwelcome Debt Milestone, Investors Business Daily, 8/04/11

US debt exceeds entire economy GDP, markets alarmed

Academic Panel Sees 50% Chance US to Plunge Into Recession, MoneyNews, 8/03/11

Political DerivativesNicole Gelinas, National Review, 8/03/11

Moody’s, Fitch: US Must Do More to Avoid Rating Downgrades, MoneyNews, 8/03/11

Where’s Your Budget, Mr. President?, Paul Ryan, Wall Street Journal, 8/03/11

Meredith Whitney: US Headed for Double-Dip Recession, Forrest Jones, MoneyNews, 8/02/11

What the Budget Control Act Means for U.S. Defense, Michael E. O’Hanlon, Brookings Institute, 8/02/11

Military Spending and the Budget Deal, Christopher Preble, Cato @ Liberty, 8/01/11

When a cut is not a cutRep. Ron Paul, The Hill, 8/01/11

Europe Declares War on American Ratings Agencies, Soeren Kern, Pajamas Media, 7/30/11

Finish the 710 Freeway, James E. Moore II, LA Times, 7/29/11

Crumbling transportation infrastructure could cost US $3.1 trillion, Metro Magazine, 7/28/11

African American Middle Class Eroding As Unemployment Rate Soars, John Roberts, FOX News, 7/28/11

Motorists’ Group Endorses “Trip Bonds” Legislation, American Highway UsersAlliance, 7/28/11

Solving the Long-Term Jobs Problem, Arnold King, Nick Schultz, The AmericanEnterprise Institute, 7/27/11

Greenspan: Fed Should Have Let Banks Fail, Greg Brown, MoneyNews, 7/27/11

Herman Cain Interview on Creating Jobs, Dick Morris, 7/27/11

Behind economic hard times, fear of the new, Robert J. Samuelson, Washington Post, 7/22/11


DUI, Uninsured Motorists, Tolling, PPPs, Variable Pricing, RUCS and Sustainable Transportation

China falls in love with SUVs, Malcolm Moore, Telegraph UK, 8/04/11

Busting Congestion in Chicago (or Any other City), Reason TV, 8/03/11

Top 10 New-Car Deals for August, Jim Gorzelany, Forbes, 8/03/11

Taking transit – a testimonial at AA meeting, TollRoadsNews,  7/28/11

Golf cart drivers aim to be legal in small town, The Tennessean, 7/28/11

INRIX launches its Traffic app on Windows Phone 7 and BlackBerry cell phone platformsTraffic Technology Today, 7/25/11

New traffic camera website aiming to drive down congestion across the UK, Trarffic Technology Today, 7/25/11

6 Reasons Driving Has Peaked in U.S. CitiesEric Jaffe, Infrastructurist, 7/14/11

Replacing the Tappan Zee BridgeManhattan Institute, 6/22/11

INRIX TRAFFIC! App Now Available on App Store

Frustrating, dangerous Metro problems for the disabled, Dana Hedgpeth, Washington Post, 8/06/11

Driving services help senior mobility without spending public money, Pamela M. Prah, Stateline, 8/04/11

Antonio Villaraigosa pushes bus-only lanes as MTA chairman, Ari Bloomekatz, Cornelius Pollmer, Los Angeles Times, 8/04/11

Low-Fare, Curbside Bus Operators Picking Up Amtrak Market Share, Don Stacom,Hartford Courant, 8/01/11

Chinese rail crash scandal: ‘official steals $2.8 billion’, Malcolm Moore, Telegraph UK, 8/01/11

China Imposes Blackout on Train Wreck Coverage, Sharon LaFraniere, NY Times,  8/01/11

With 210 injured, 35 fatalities, more concerns that government sacrifices people’s lives and safety for world’s largest public works project and cloaks failures in secrecy or propaganda.

A new third rail, The Economist, 7/30/11

Japan has operated bullet trains for 47 years without a fatal accident.

Report casts doubt on forecasts for California high speed rail, Dan Weikel, LA Times, 7/29/11

Cambridge used a now-obsolete survey method, made unrealistic assumptions, failed to properly analyze what would happen to ridership for varying levels of train service, and did not consider the impact of airline competition…But the bigger take away from all this is that there are now two independent reviews that show things are lacking here.

Al-Qaeda Claims U.S. Mass Transportation Infrastructure Must Drastically Improve Before Any Terrorist Attacks, The Onion,  7/28/11

Significant repairs and upgrades are needed for the militant group to consider destroying any roads, bridges or railways with terrorist attacks.

Using Market Processes to Reform Government Transportation Programs, Report No. 2: Improving Transit with Competitive Contracting, Wendell Cox and Ronald Utt, Heritage Webmemo #3312, 7/07/11

Public transportation has to change to remain viable, according to a new Heritage Foundation analysis. For decades, transit’s principal problem has been insufficient cost control rather than insufficient revenues. Over the past 25 years, transit’s operating cosdts have been approximately $15 billion (on a passenger mile basis). Had transit agencies kept costs within inflation – as most businesses do – transit would have been able to provide 40 percent more service in 2009. Without government unable to provide more subsidies, a much better solution is for transit systems to use competitive contracting to reduce costs and improve quality of service.  — Wendell Cox and Ron Utt

John Charles responds to Portland Mayor Sam Adams, John Charles, Cascade Policy Institute, 7/25/11

Los Angeles Metro Bus System Compares Favorably With Its Peer Group, Tom Rubin, New Geography, 7/28/11

KRM dead, Racine County to get back $300,000 in past rental car fees, Stephanie Jones, TheJournalTimes, 7/25/11

MetroAccess Knowingly Places Hundreds of Disabled Paratransit Passengers at Risk, Bus riders Union of Austin, TX, 4/02/11


TODs, Eminent Domain, Property Rights

Plant a Garden, Go to Jail for 93-Days?! Nanny of the Month, Korchula Productions, July 2011

Growth controls = Housing Collapse, Sterling Burnett, National Review Online, 8/05/11

How Government Regulation Affects the Price of a New Home, Paul Emrath,k National Association of Home Builders, July 2011

Rural US disappearing? Population share hits low, Hope Yen, Associated Press, 7/28/11

Moving From The Coast, Wendell Cox, New Geography, 7/28/11

Program Offers Cash Incentives To Live Downtown, CBS Detroit, 7/25/11

In the five-year, $4 million “Live Downtown” program, first-time home buyers will get a $20,000 forgivable loan. Renters will get a $2,500 first year allowance, and $1,000 the following year. Employees who already own a home in the city will be given up to a $5,000 grant for exterior improvements.

Why Amnerica’s Young and Restless Will Abandon Cities for Suburbs, Joel Kotkin, Forbes, 7/20/11

When it comes to population growth, Houston is No. 1, Rice University, 7/06/11

Why Some Cities Are Growing And Others Shrinking, Dean Stansel, Cato Journal, Summer 2011


Beaver Fever Fanaticism: EPA Eco-Radicals Are Hurting Families at the Tap, Christopher Coffey, Pajamas Media, 8/07/11

Blame the Washington Bureaucracy for High Gas Prices, Rob Bluey, Heritage Foundry, 8/04/11

New Process Could Make Canadian Oil Cheaper, Cleaner, Kevin Bullis, MIT Technology Review, 8/03/11

GM Confirms Slow Chevy Volt Sales, Mark Modica, National Legal and Policy Center, 8/02/11

CBO: Federal Loan Guarantees for the Construction of Nuclear Power Plants, August 2011

Higher fuel standards mean higher death toll, Washington Examiner EDITORIAL, 7/28/11

Issa launches investigation into Obama’s new fuel economy standards, Andrew REstuccia, The Hill, 7/29/11

Grow Our Way Out, IBD, 7/29/11

President Obama Announces Historic 54.5 mpg Fuel Efficiency Standard, US DOT, 7/29/11

New NASA Data Blow Gaping Hole in Global Warming Alarmism, James Taylor, Forbes, 7/27/11

America’s power grid too vulnerable to cyberattack, US report warns, Mark Clayton, Jewish World Review, 7/28/11

The Obama EPA’s Brave New Future, Heritage Foundry, 7/28/11

Intoxicated on Independence: Is Domestically Produced Ethanol Worth the Cost?,Scientific American, 7/28/11


Obama’s War on the Welf-Made Man, Lurita Doan, Townhall, 8/08/11

2011 Hall of Fame Shannon Shane speech, 8/07/11

Parents: Hone Your Kid’s BS Detector!, Doug Giles, Townhall, 8/07/11

DEA Letting Cartels Bring Drugs Over the Border, Helen Whalen Cohen, Townhall, 8/06/11

USPS Bailout on the Horizon, Trey Kovacs, Open Market, 8/04/11

Anti-terror plan allies White House with Muslim groups, Neil Munro, Daily Caller, 8/04/11

Documents: Feds allegedly allowed Sinaloa cartel to move cocaine into U.S. for information, Diana Washington Valdez, El Paso Times, 8/04/11

Communist Party USA Officially Endorses Barack Obama, Vision to America, 8/04/11

Policing Beltway Lobbyists, Jonathan H. Adler, National Review Online, 8/02/11

UCLA professor’s new book empirically demonstrates liberal media bias {VIDEO],Jamie Weinstein, 8/01/11

Plug-and-Play Batteries: Trying Out a Quick-Swap Station for E.V.’s, Bradley Berman, NYTimes, 7/31/11

The U.S. May Need More Lawyers!, Clifford Winston, Robert W. Crandall, Huffington Post, 7/29/11

Gunwalker: William Newell Circles the Wagons, Patrick Richardson, PM, 7/28/11

NHS delays operations ‘as it waits for patients to die or go private’, Martin Beckford, Telegraph UK, 7/28/11

3D printing: the technology that could re-shape the world, Shane Richmond, TelegraphUK, 7/28/11

Obama to Banks: We’re Not Defaulting, Charlie Gasparino, Fox Business, 7/25/11

Germany’s Choice – Part 2, Stratfor Global Intelligence, 7/26/11


Short-Term Thinking on Debt by maliab
July 20, 2011, 5:12 pm
Filed under: Economy, Hawaii Sunshine, Limited Government | Tags: , , , ,

Well that didn’t take long.

Our nation’s spending has increased so much over the past decade that a showdown (like the current one over the debt ceiling) was pretty much inevitable.  It’s interesting to note that though the claim that we would have to cut spending by 44% to balance the budget sounds scary, it actually just means scaling us back to 2003 levels.  That’s not exactly the olden times when phone calls were a nickel and we had to walk to school in the snow.

Few things demonstrate the great contrast in economic policy like a debt/budget fight.  Because (as dull as these things can sound when reduced to charts and dollar figures on the evening news), what we’re really witnessing is a dispute over economic philosophy and the direction our country will take for the foreseeable future.  Consider this comment from Moody’s (which has made quite a few appearances in this space on the issue of credit and bond ratings):

“If the debt limit is raised again and a default avoided, the Aaa rating would likely be confirmed. However, the outlook assigned at that time to the government bond rating would very likely be changed to negative at the conclusion of the review unless substantial and credible agreement is achieved on a budget that includes long-term deficit reduction. To retain a stable outlook, such an agreement should include a deficit trajectory that leads to stabilization and then decline in the ratios of federal government debt to GDP and debt to revenue beginning within the next few years.”

To pass through this crisis without looking towards a long-term resolution is merely to pass the burden of our wasteful spending onto our children.  It is a future that will be defined by higher taxes and a weaker economy.  That’s not a legacy to be proud of.

Brah, Can You Spare $25K? by maliab

The Institute for Truth in Accounting has released its comprehensive study of the assets and liabilities of all 50 states, ranking them by the depth of their debt.  And, for the first time, the Institute was able to take into account pension and health care obligations.  That ominous sound you hear is our tax dollars slowly being sucked into the bottomless abyss of government debt.

For what it’s worth, few states made a particularly good showing in the study.  Only four (Nebraska, North Dakota, Utah, and Wyoming) have assets available to pay their debt and obligations related to pension and healthcare.  And I understand that none of them have good surfing.

Unfortunately, Hawaii was particularly bad.  Bottom five bad.  $11,490,322,000 in liabilities bad.  The Institute ranking left Hawaii in 47th place (surpassed only by Illinois, New Jersey, and Connecticut) with a per-taxpayer of $25,000.  In other words, each of us would have to cough up $25K in order to raise sufficient funds to pay the State’s outstanding bills.  Of course, by now (considering our ever-growing liabilities and the government’s complete inability to stop spending or balance the budget) it’s probably a bit more than that.  And you thought your cousin was an irresponsible spender.  But no single human being can spend money like decades of unaccountable politicians all looking to win votes in their next election.

Falling Grades by maliab

By Malia Hill

The politicians can try to paint whatever picture they would like about the depth of Hawaii’s budget crisis, but there are some inescapable signs that we need to worry.  Like the fact that Moody’s just downgraded Hawaii’s General Obligation Bond Rating.  From Hawaii Reporter:

Hawaii’s “strained” state financial operations, the depletion of its reserves in fiscal year 2011, and covering budget shortfalls with one-time solutions — these are the factors that Moody’s Investors Services cited in downgrading the general obligation bond rating for an estimated $5.1 billion in debt.

Moody’s announced the downgrade Tuesday in a report on Hawaii’s financial condition, legislative action from this past session including tax increases and special fund raids, and the state’s financial obligations and debt.

Hawaii’s unfunded pension ratios, high debt ratio and growing expense for unemployment benefits were also used to justify the downgrade to Aa2 from Aa1. The state’s 2009 certificates of participation also were downgraded to Aa3 from Aa2 (approximately $40 million outstanding) and to A1 from Aa3 (approximately $24 million outstanding) on the state’s 2006 certificates of participation.

What does this mean for Hawaii’s taxpayers?  Nothing good.  Borrowing on such bonds is the way that the state funds infrastructure projects, like highway repairs.  The downgrade means higher interest on the bonds, which will come from our pockets.  And all of this is brought to us by the waste and lack of accountability that we at Grassroot have been trying to bring attention to:

Moody’s also cited the state government for its reporting delays. They point out that audited financial reports have been late since 2007, noting this is “a weak trend that detracts from the state’s other relatively strong governance practices, such as multi-year financial planning and quarterly binding consensus revenue forecasting.”

Moody’s points to Hawaii’s spending and special fund raids as contributing factors for its “large operating deficit” including $539 million (10 percent of operating revenues) in fiscal 2012 and $498 million (8.6 percent) in fiscal 2013 and a 4 percent gap for the current fiscal year.

Boy, it’s tough to be right so often.  And not just on the special fund raids, but on the lackluster attempts to address the problem:

Moody’s points out that a number of the legislative actions offer only one-time or temporary solutions to covering budget shortfalls created by the spending, including the “suspension of general excise tax exemptions, temporary limitations on itemized deductions and delays in the increase of the standard deduction and personal exemption.”

Plans to increase the rental car surcharge and cap the counties’ share of the transient accommodations taxes are also just temporary solutions, unless they are made permanent, Moody’s said.

Of course, it’s never too late to start to fix things, and even Moody’s held out the hope that a renewed tourist industry and proactive measures to address the pension system could stabilize (and even improve our rating).  So let’s get on with it.

Conflict of (Accumulating) Interest by maliab

By Malia Hill

Collective bargaining between state employees and state government has been something of a . . . contentious topic in recent weeks.  And I’ve noticed that those who advance positions that are not completely pro-union tend to get a lot of nasty hate mail.  So I would like to begin by pointing out that this particular blog entry was written by Charlie Sheen.

The problem seems to be that we, the non-state-employee taxpayers are represented in these negotiations by people who are not necessarily thinking of their position as safeguarding the economic future of Hawaii or the burden placed on regular citizens.  And the position of the unions is quite straightforward.  Plus, they have the ability to shut down necessary public services, making us taxpayers and citizens all the more annoyed and frustrated.  So that even when we’re sinking in budget and pension problems, we get negotiation results like the recent agreement for compensatory time (in other words, days off) for state employees.  From the invaluable Greg Wiles of Hawaii Reporter:

Recent labor union settlements negotiated between the state and labor organizations will give thousands of workers at least four days off on a paid basis and bring an end to their furloughs.

The state said it believes the agreements negotiated with the Hawaii Government Employees Association (HGEA) and the United Public Workers (UPW) unions won’t increase its labor costs, though a former Gov. Linda Lingle Administration executive said the state may end up footing a bigger payroll bill.

. . . .

But perhaps more significantly, the deals includes something known as Compensatory Time Off, which past and present government executives said can be taken as paid days off or cash payments.

The federal/special funded employees are to receive 32 hours of Compensatory Time Off in return for four furlough days taken during the months of February and March. Some employees may get up to 88 hours in Compensatory Time Off.

Material given to the Hawaii Public Housing Authority directors and posted on the agency’s website also says under the UPW all furloughed employees shall receive 56 hours of Compensatory Time Off.  The directors were told the settlement agreement will involve the majority of the Hawaii Public Housing Authority staff.

“The termination of the furlough requirements for the UPW and HGEA will impact the Hawaii Public Housing Authority fiscally; the agency will have to pay 100% of salaries and provide four days (32 hr.) of compensatory time off for each of the filled positions which are currently either 100 percent federal or 100% special funded,” the memo to Hawaii Public Housing Authority directors says.

. . . .

Others have questioned why the state would give workers pay for not working in resolving a situation involving furloughs.

Moreover, there are questions if the state can use federal funds for the payments. Added payroll costs would come at a time when the state is facing budget deficit because of lower tax collections. Over the next two years the deficit is expected to be more than $1 billion.

Ted Hong, chief state negotiator during the Gov. Linda Lingle’s Administration, said he did not know specifically about the settlements, but believes the state might have a higher labor bill.

He said typically the federal government does not fund payments that involve comp time or overtime, and that the state may have to foot the bill this portion of the Compensatory Time Off given the workers.

Hong said typically Compensatory Time Off recipients can choose to take the time off or receive cash. That could lead to a situation where workers cash in the Compensatory Time Off in the years leading up to their retirement, adding to the salary figures used in calculating their pensions.

He said the employees might also elect to take Compensatory Time Off payments on a day they earn overtime, and possibly qualify for double-overtime pay.

Has anyone else started to notice a pattern here?  It seems that every time the state negotiates with the state union, it ends up creating more and more “future debt”.  Eventually, that bill isn’t going to be able to be pushed off any longer.

The Politics of “Now” by maliab
March 22, 2011, 5:59 pm
Filed under: Economy, Hawaii Sunshine | Tags: , , , , ,

By Malia Hill

There is a reason that there is generally very little impetus among politicians to make the tough choices for the sake of the long-term good–by the time the “good” comes around, they won’t be there to get the credit.  Long-term thinking doesn’t get far when the next election is a year away.  And most politicians feel (and to be fair to them, they have reason) that voters aren’t going to reward them at the polls for cutting the voters’ favorite entitlements.  Consider what Senator Sam Slom (a striking exception to the above rule) has to say about HB1034, an “emergency” appropriation bill being fast tracked by the Senate at the request of Governor Abercrombie:

This bill originated from the Governor. There was no “emergency” to rush its passage other than the Governor and unions wanted it now.

The bill calls for taxpayers to pay $18 million-plus to the state employee health fund, EUTF, (in addition to another budget appropriation for the EUTF), to offset union medical premium increases because of the Governor’s promise to the labor unions on the day of his inauguration in December, 2010.

This was not the result of collective bargaining—there is currently a collective bargaining contract in effect—it was a political promise by the Governor to increase the taxpayer subsidy for union workers from 50% to 60% of their medical premiums.

Just so we’re all on the same page here, let’s break this down.  Hawaii is in a state of financial meltdown.  The state legislature is passing new taxes left and right and still can’t begin to cover the budget shortfall, which in turn is one of the worst in the country thanks in good part to the unfunded liability from the state pension system and other state employee benefits.  Like health insurance.  The economy isn’t great, and tourism is expected to take a multi-million dollar hit from the tragedy in Japan.  And in the midst of this, the legislature is passing an $18 million bonus to state employees based on the Governor’s electoral pandering.  Essentially, not only do we in the private sector have to pay for our own health insurance premiums, we also have to pick up the tab for the state employees.  This is classic short-term thinking.  Eventually, the house of cards that is the Hawaii economy is going to collapse under the weight of bad governance, but Governor Abercrombie seems to be betting that he’ll be safely retired by then and it will be someone else’s problem.  Like us taxpayers.

(N.B. Senators Slom and Hee were the only ones to vote against HS 1034.)

De-Railed by maliab
February 27, 2011, 3:51 pm
Filed under: Economy, Hawaii Sunshine | Tags: , , , , , ,

By Malia Hill

Greg Wiles of Hawaii Reporter is going to end up winning the unofficial Hawaii Sunshine award for Excellence in Reporting on Hawaii’s Troubling Financial Situation.  It’s tough to be such a consistent bearer of bad news, but (fortunately for the cause of transparency), he hasn’t let up on letting us see just how big a hole the government continues to dig for the taxpayers.  For example, check out this recent article, examining the probability that Congress will cut funding for the Honolulu Rail project.

Let’s go back into the misty past . . . all the way back to the autumn of 2010.  You may recall then that defenders of the Rail Project indignantly responded to critics who worried about the state (and Hawaii’s taxpayers) getting stuck with the tab for an already-stunningly-expensive project that was almost sure to go over-budget.  “No, no!” exclaimed the Rail Supporters.  “The federal government is committed to the project.  It won’t end up being a financial debacle for Hawaii.”  (In my imagination, they also referred to the magic beans that was going to grow a magical money tree to pay for it.)

And now, these many weeks later . . . Congress is considering cutting funding–an incredible surprise for anyone who had picked “one year or more” in the “When will Congress abandon the Rail” office pool.  No, it’s not a settled question yet, and Senator Inouye plans to protest it with all his might, but we’re not off to the best start.  Consider some highlights from the Greg Wiles article:

The House Appropriation Committee has proposed cutting roughly 20 percent of the Honolulu project’s $55 million funding request for fiscal year 2011, according to Congressional sources.

The funding proposal is at this point just that – a measure that still must pass the full House and then an expected showdown with Senate Appropriations Committee headed by Hawaii U.S. Sen. Daniel Inouye. But the proposed measure adds to the questions raised by critics about the project’s finances and how the Republican-controlled House will treat the project in the future.

“The big issue is how much the city is going to get,” said long-time rail foe Cliff Slater.

“I don’t think the city is going to get the $1.5 billion with all the cutting going on.”

The city is counting on getting $1.55 billion from the Federal Transit Administration to help fund the effort.

The recently released White House budget for next year calls proposes $250 million for Honolulu’s rail project.

But first Congress must pass a funding resolution in March to continue government operations through the rest of the federal fiscal year, which ends in September.

The House Appropriations bill was proposed on Feb. 11 and meets a pledge by Republicans to dramatically cut spending by shearing $61 billion from the budget.

. . . .

The House action isn’t the only financing issue for the city, though.

A Hawaii Senate bill proposes raiding funds the city has received from a general excise tax surcharge and repaying the $200 million from general obligation bonds it will issue.

It would also extend the half-percent Oahu surcharge that was enacted to pay for the rail project. It would expire in 2024 instead of 2022, under the bill, SB1426.

Opponent have questioned various aspects of the bill, including whether the proposal represents deficit financing through a bond issue and if it is trying to remedy a short-term budget problem with longer-term financing. Among those raising questions about the bill is the City and County of Honolulu and the Abercrombie administration.

But they also charge the measure could jeopardize how the Federal Transit Administration and Congress fund the project. They say it may also cause delays in the project and said lawmakers should table the bill.

The measure has passed the Senate Public Safety, Government Operations, and Military Affairs committee and will next be heard by Ways and Means.

The project is also facing two lawsuits, one of which challenges how environmental approvals could be given for the project when a complete survey of Native Hawaiian burials hasn’t been completed.



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