COVID-19 Reduction Invoice consists of $ 70 million for Honolulu Rail

The $ 1.9 trillion COVID-19 aid package flowing through Congress includes $ 70 million to cover the hundreds of millions of dollars Honolulu’s rail transit is expected to be due to the pandemic will lose.

Senator Brian Schatz, who now chairs the Senate Transportation Subcommittee, announced the funding in a news release on Sunday.

“Our goal was to help the city pay part of its share by covering the loss of local tax revenue caused by the pandemic,” Schatz said. “This is a relief, but (the Honolulu Authority for Rapid Transportation) and the city still have a workable budget to work out and get this project up and running for the Honolulu people.”

Oahu’s rail project continues to struggle financially as costs have risen again and tax revenue has evaporated amid the pandemic.

US Senator Brian Schatz: “This is a relief, but HART and the city still need to work out a workable financial plan.”

Cory Lum / Civil Beat

For 2020, the rail lost around $ 62 million in space and excise tax dollars that the project is expected to bring in. The $ 70 million railroad money in the federal COVID-19 bill would cover that amount.

These dollars “will allow HART to continue working towards its critical path-building goals,” said Lori Kahikina, HART’s interim executive director, in a press release on Sunday.

However, HART’s tax officials predict that the railroad will suffer a COVID-related loss of $ 376 million in room and excise tax revenues during the life of the project alone. In fact, HART’s release on Sunday said the $ 70 million will cover “part” of the deficit related to the pandemic. It is not yet clear how the remaining shortfall will be covered in the coming years.

These taxes on space and consumption together are the greatest source of funding for the difficult transit project. They are expected to generate around $ 7 billion for the railroad.

Rail is also experiencing a potential funding loss on another front: around $ 500 million is expected to forfeit by the end of this year.

That includes the $ 250 million that was due to expire in December but was given a one-year notice of just a few days, as well as an additional $ 250 million payment due to expire later this year.

Federal transportation officials have not released any of their grants to the Honolulu railroad since 2014 because the city is unable to carry out the project.

Previously, FTA leaders said they would not release the money until the city placed the final major construction contract to complete the rail to the Ala Moana Center, as long as the contract was on budget.

However, those steps won’t be completed by December, HART officials say. It remains to be seen what progress the free trade agreement will have to make this year so that the city can hold onto its federal railroad dollars.

“FTA’s goal is to ensure that taxpayers’ money is used as intended and that the project is delivered as agreed by the project sponsor under the Full Funding Grant Agreement (FFGA),” the agency said in December.


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