Farewell to Reform|
Council Approves Rail Transit Development Agreement (Astrid Monson)
Summary of Rail Transit Capital Financing Plan
Consensus Questions (Health Care)
Architectural Planner Donald Monson Dies (Murry Engle)
General Membership Meeting
Council Approves Rail Transit Development Agreement
On November 14 the City Council by a 5 to 4 vote in favor, adopted Bill 112, an ordinance authorizing Mayor Fasi to enter into a Development Agreement with Governor Waihee in accordance with 1991's State Acts 183 and 184. In effect, the Development Agreement authorizes the Agreements submission, after execution by the Mayor and the Governor, to the 1992 State Legislature. Included is a 10 year financial plan covering construction costs of the rail component of the bus-rail system.
These, in 1991-2002 "year of expenditure" dollars, total $2.247 billion, of which $618 million is to be contributed by the Federal Government (UMTA); $1.865 billion is to be raised from the 1/2% surcharge on the State 4% General Excise Tax, and $100 million from State and City General Funds. In addition, $911 million will be raised from bonds issued between 1993 and 1997 and repaid out of the surcharge tax proceeds by 2002.
This information was released by the City for the first time on October 3. For the next six weeks the City Council, the press and the public tried to get a clear picture of what the City was actually proposing and what the costs and tax burden really would be. No totals were given for either revenues to be raised or expenditures to be paid out -- only a year-by-year "cash flow" spread sheet. The only table of totals made available was League's, which was published on October 6 as an appendix to a carefully documented "ANALYSIS of Impact of 1/2% Excise Tax Surcharge on Oahu Households 1993-2002." (Copies available at League office)
Our major findings, and the table, follow:
Though our ANALYSIS was widely distributed to the press, TV, radio, etc., it received little attention. The City finally withdrew its statement (based on State figures) that the cost per household would be only $4 to $15 per year. The State raised the ante to $20 to $40 per person per year but believed business would absorb much of the increase, resulting in a "net cost" to a poor family of four of only $1 a year, after tax credits.
Then the Committee for Sensible Transit came out with a block--buster $608 per 4-person family per year. This figure was ridiculed by such persons as Council member Donna Mercado Kim. League pointed out that if the 25% or 30% of the surcharge tax paid by tourists was subtracted, COST's figure would be close to League's $408 to $441. (See above, points 7 and 8.)
By this time the fur was flying. Finally, on November 7, twenty-one UH faculty members mostly from the Department of Economics -- issued a report challenging many of the City's figures including ridership and costs as well as the tax burden.
To quote the November 8 Advertiser, "economics professors Walter Miklius and James Moncur, specialists on Hawaii's State tax system, said they believe the real cost per family of four will be approximately $4,600 over a 10 year period .... Professor James Roumasset, who teaches public financing, said he believes the figure may actually be closer to $10,000 per family if minimal cost overruns are included and the cost per family is stated in 1992 dollars."
League's Transit Study Committee cannot but be gratified at the almost uncanny similarity between the professors' conclusions and our own.
Several of the Council majority emphasized that they were voting "yes" only to keep the project alive, to give the City a chance to complete its planning and a final Environmental Impact Statement. Council member Mirikitani, the swing vote, stated that if he were not satisfied with a promised revision of the bases of the regressive Excise Tax surcharge, he could not continue to support the project.
It is too early to know just what the Council's decision means in the long run. Many more steps need to be taken before the decision is final. Stay tuned.
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