A new administration coming into the White House promises to bring huge investment to the nation’s infrastructure.
What could this mean for Hawaii, especially Honolulu’s cash-strapped rail project?
Many are still taking a wait-and-see approach while President-Elect Donald Trump builds his transition plan, but he has announced bold promises particularly for transportation investments.
After winning the election, he shared his thoughts on what could be a trillion-dollar plan: “We’re going to rebuild our infrastructure, which will become, by the way, second to none.”
According to the transition plan, “”Our roads, bridges, airports, transit systems and ports will be the envy of the world and enhance the lives of all Americans… We will build the roads, highways, bridges, tunnels, airports, and railways of tomorrow,” the Trump administration says.
We asked local leaders what will that mean for Hawaii.
“With our rail project, we are looking for more federal dollars,” Honolulu Mayor Kirk Caldwell said, “and hopefully we’ll have a president who is going to be supportive of doing exactly that.”
Besides broad program outlines, presidents ultimately defer such decisions to the agencies handling them — in this case the Federal Transit Administration. Caldwell estimates it could take until next spring or summer for the new FTA leadership to be confirmed.
“I have already asked the current administration for additional money, directly face to face,” Caldwell said. “I’ve been told now twice ‘No,’ but they also told me wait until the new administration comes in. So I am going to do what they advised. I am going to wait for that person. I’m going to go up and ask for the money.”
As part of that third pitch for more, the mayor says he’ll point out the $1.55 billion the feds have pledged used to cover nearly one-third of the project cost, but now that the cost estimates ballooned to $8.6 billion, the federal share has dropped below one-fifth. Honolulu is approaching a nearly $2 billion dollar funding gap.
“I think I owe it to the taxpayers of this island to go to Washington and say we want to make up that difference,” Caldwell said. “I am hopeful. If you look at most other mass transit projects around our country, most of them get 30, 40, 50 percent of the funding.”
Congresswoman Colleen Hanabusa, former rail authority chairwoman, doesn’t see more leverage with the feds nor establishing either a larger or pre-set percent-share of the project.
“They wouldn’t do that. That’s a blank check with anybody they have a FFGA (Full-Funding Grant Agreement) with,” Hanabusa said.
She said getting more is not guaranteed, and neither is getting the original pledged amount, according to Hanabusa and Mike Formby, now her chief of staff and a former HART board member and interim CEO. About half of the $1.55 billion federal pledge is already frozen pending a HART recovery plan submission and approval.
“Our goal is to make sure this $750 million in unreleased FFGA funds are still committed to this project,” Formby said.
“If they feel we cannot finish and build to Ala Moana or come up with some alternative they feel will have utility, we could lose,” Hanabusa said. “They’re still sitting on $750 million.”
The mayor is confident the FTA will honor its original pledge, telling KHON2, “In the interim period of transition I think we’re going to be fine in working closely with the FTA on the money they’ve already committed to.”
On Monday, HART’s board passed its 2018 budget, a budget that counts on that FTA grant money flowing again, especially come spring 2017 when a cash flow crunch hits according to HART deputy executive director Brennon Morioka.
“Right now we’re still drawing down on the federal fiscal year 2014 appropriations. We do anticipate those monies to run out approximately in the spring of 2017,” Morioka said. “The FTA is not going to want to cash strap us and have us borrow more money than we have to just to meet cash flow needs.”
HART submitted an interim recovery plan earlier this fall, seeking a deadline extension to next summer for the final, but with a draft financial plan still due the first week of December. Morioka says they’re on target for that.
“We are at least initially hopeful that some of President-Elect Trump’s previous statements about his support for transit — mass transit in general — is going to come through,” Morioka said.
Hanabusa says there’s skepticism in Congress over just what a trillion-dollar Trump infrastructure plan will look like. Trump’s transition plan so far outlines about half of that coming from government investment.
“Americans deserve a reliable and efficient transportation network and the Trump Administration seeks to invest $550 billion,” the Trump transition plan reads at this time.
The rest is said to be coming from things like private partnerships, tax incentives – even toll roads and bridges — to get up to a trillion-dollar valuation.
“I can’t imagine a toll road in Hawaii,” Hanabusa said. “I really can’t. The most important thing is we don’t know what a Trump administration looks like. Until we get a better sense of that we’re going to have to just expect we will be in the position of guessing along with everyone else.”
The Trump plan aims to fix or build far more than just railways. Hawaii’s state Department of Transportation director has already been to Washington last week to talk with the delegation about ideas for Hawaii.
“We’ll be prepared to try to help on every front,” Formby said, “whether it’s airports or harbors or the city’s rail project. Whatever it is, we’re here to help. We will keep our eyes open and look for opportunities.”
Meanwhile the mayor says the city will be lobbying on two fronts — one in Washington, the other at the state Legislature, asking for an extension of the general excise tax surcharge.
“We need to show to the federal government there is support to raise our share,” Caldwell said. “It’s a two-prong approach. We’ll be approaching the Legislature along with my going up to Washington.”
Wheels are already in motion at the Honolulu City Council to ask state lawmakers for a general excise tax extension, likely in perpetuity. The legislative session reconvenes in January.
The FTA answer on whether HART will get that recovery-plan deadline extension would have to come soon if granted — otherwise the recovery plan is due by the end of December.