Grassroot Institute Obtains HART Check Register

Grassroot Institute Obtains HART Check Register

Transparency request represents important step in answering questions about Rail HONOLULU, HAWAII–June 29, 2015–While questions continue to be raised about funding and spending in the Honolulu Rail project, the Grassroot Institute of Hawaii has taken a step towards shining a light on the issue by obtaining the check register for the Honolulu Authority for Rapid Transportation (HART). The records, which have been posted on OpenHawaii.org, the Grassroot Institute’s transparency website, provide an interesting overview of HART’s spending practices. A preliminary breakdown of the records obtained reveals that the vast majority of the expenses listed are related to construction, design, and land costs. That is consistent with expectations, and the high price of land acquisition and construction contracts are part of the runaway costs that many critics of the project have feared. Further examination of miscellaneous payments not related to construction, design, and land find administrative costs to be the most significant, followed by planning and insurance. “The state has a responsibility to the taxpayers to ensure that the Rail project is managed in a way that does not create an endless sinkhole of debt,” stated Dr. Keli’i Akina, President of the Grassroot Institute of Hawaii. “By releasing HART’s check register, we are taking an important step towards answering the many questions raised in the recent legislative session about HART’s spending and requests for further funding. Transparency is the heart of an informed electorate, and we urge all interested parties to visit the OpenHawaii.org website and review these records for themselves.” The HART check register can be viewed...
Grassroot Testimony on The Rail Surcharge

Grassroot Testimony on The Rail Surcharge

March 19, 2015   To: Senate Committee on Transportation Sen. Clarence Nishihara, Chair Sen. Breene Harimoto, Vice Chair   Senate Committee on Public Safety, Intergovernmental and Military Affairs Sen. Will Espero, Chair Sen. Rosalyn Baker, Vice Chair   From: Grassroot Institute of Hawaii President Keli’i Akina, Ph.D.   RE: HB 134 — RELATING TO TAXATION   Dear Chair and Committee Members: The Grassroot Institute of Hawaii would like to offer comment on HB 134, which would permit all counties to adopt ordinances allowing for surcharges on state excise and use tax at a rate of 0.25%. This bill makes permanent and more wide-reaching a surcharge that was initially intended to be temporary, albeit at a slightly lower rate (for the time being). However, though a lower surcharge is a step in the right direction, we are concerned that the long term effect of raising the state excise tax is being overlooked. The nature of our state’s General Excise Tax already places Hawaii among the worst states for sales and user taxes. The 2014 ALEC-Laffer State Economic Competitiveness Index (otherwise known as Rich States, Poor States) ranks Hawaii 50th among all states for its sales tax burden, meaning that the GET contributes a significant negative effect to the state’s economic outlook.[1] The Tax Foundation ranks Hawaii 37th in state business tax climate, in part because of the GET (ranked 31st in their study). [2] At least one study of OECD countries has found that along with corporate and personal taxes, consumption taxes like the state excise tax can be economically harmful over the long-term.[3] In fact, economic theory recommends using...
The “Rail” World, San Francisco

The “Rail” World, San Francisco

In a recent episode of E Hana Kakou, Grassroot President Keli’i Akina interviewed LaVonda Atkinson, the now-famous whistle-blower on the San Francisco Rail project. Atkinson’s experience offers some important lessons for Hawaii. Not only in terms of how our Rail project has the potential to overrun costs and timelines in a way that the taxpayers never imagined–though that is a serious concern. But also in the example she provides as a symbol of integrity and accountability in government. In 2012, Atkinson began working as a cost engineer for San Francisco’s Central Subway project. This was a plan to add a two mile extension (at the price of approximately $ 1 billion per mile) to the existing fixed rail line. Although federal rules require projects that receive more than $20 million in federal funds to have a qualified cost engineer on the project in order to fulfill reporting requirements, at the time that Atkinson joined the project, there had not been a cost engineer on board for more than two years. What is a cost engineer? In short, it’s someone who is trained to do financial cost analysis of complicated projects and fulfill the complex reporting requirements needed by the government. At the time she began her work with the San Francisco rail project, Atkinson, who studied at UC Berkeley, had been doing cost analysis for 18 years, often for large federal agencies like NASA or the Department of Defense. She says that she noticed problems with the integrity and the accountability of the project within the first two weeks of starting there. The managers had set up a special module in...
GE Tax: Will Cost Overruns Lead to New Rail Showdown?

GE Tax: Will Cost Overruns Lead to New Rail Showdown?

The city and county of Honolulu approved construction of a rail transit system in 2005 under the direction of the Honolulu Authority for Rapid Transportation (HART). Stretching 20 miles from East Kapolei to Ala Moana, this $5.26 billion rail line is projected to partially open in 2017 and be completed in 2019. But cost overruns created by an artificially compressed construction schedule are eating away at the financing. If HART does not act to rein in contract spending, moves to extend the GE Tax surcharge could lead to another rail showdown. Passed by legislators in 2005, the 0.5% General Excise Tax surcharge was to aid only in construction costs, but recently some politicians have been intimating at an extension to the GET surcharge. Mayor Caldwell suggests continuing the GE tax “in perpetuity” to support operating costs. The present rail surcharge will expire on December 31, 2022—two gubernatorial terms from today. Public approval of the rail project is waning. In one poll performed by Civil Beat in October 2013, only 35% of residents supported the Honolulu Rail project, down from 43% in 2012 and 50.6% in the 2008 general election. At the recent Grassroot Institute candidates’ forum, Republican gubernatorial candidate Duke Aiona said that “if they’re going to present any proposals as far as extending that financing, they will meet opposition from the 5th floor when I’m governor.” Randal O’Toole in a recent Cato Institute analysis, explained: “Honolulu is building a 20-mile elevated rail line that costs well over twice as much as the average light rail. Yet those lines will be limited to little (or no) more than light-rail capacities.” In addition, the increase in local jobs has been paltry compared to...

Kirk Caldwell Compares Honolulu Rail to Landing on the Moon?

During last night’s mayoral debate, former Honolulu managing director Kirk Caldwell sarcastically asked retired Governor Ben Cayetano whether or not he would ask President Kennedy what his backup plan was in response to his challenge to go to the Moon. I think it’s worth reminding the former managing director of a few things: Funny Caldwell should mention going to the Moon, because the cost of a single Saturn V rocket launch was $185 million in 1969. By contrast Honolulu Rail is $5.3 billion. One could therefore say it is cheaper to go from the Earth to the Moon than from Kapolei to Manoa. (And for those of you wondering, the last Space Shuttle launch into orbit only cost $450 million.) There is absolutely no comparison between an Apollo space capsule and Honolulu Rail. I mean, is this the best our elected officials can come up with? President Andrew Johnson rode on rail in 1869, while the NASA Apollo astronauts rode on a rocket in 1969. I was born in 1979 and I was told we’d have flying cars by now. In case anyone has forgotten, this is the 21st century. Rail? Really? Is that the best and most awe-inspiring technology that our politicians aspire to these days? If rail is the Apollo spaceship of 2012, our politicians either have a shrinking imagination or a such a low opinion of the average voter that they think someone would actually be inspired by that. This being said, one can’t help but concede that space travel and Honolulu Rail do have one thing in common: both have out of this world, astronomical...