Cayetano says rail will worsen city's already bleak finances

Published On: Aug 23 2013 06:53:07 PM HST   Updated On: Aug 23 2013 07:18:37 PM HST

They sparred during the race for Honolulu mayor last year, but both ultimately lost to Kirk Caldwell. But, when it comes to the city's $5.3 billion rail project, Ben Cayetano and Peter Carlisle are polar opposites: Cayetano is fiercely opposed, while Carlisle is a staunch supporter.

So, when it was revealed earlier this week that Honolulu is facing a $26 million shortfall in its operating budget this fiscal year, and as much as $156 million the next, Cayetano made the connection to rail, while Carlisle did not.

Cayetano, a former two-term governor, believes the city of nearly one million residents simply can't afford to operate and maintain the elevated train once it is built.

"So either you raise taxes, you cut services, or you do a combination of both," Cayetano told KITV4. "I think that the mayor and the City Council are going to have to deal with that."

According to the rail project's financial plan, subsidies for The Bus, Handi-Van and rail will reach 17 percent of the city's general fund through fiscal year 2030. If you add Honolulu's current debt service of 19.2 percent, that's more than 36 percent of the city's annual tax and fee collections going toward those two items alone.

However, it's important to note the city must continually grapple with other fixed costs, such wages and health and pension benefits for its workforce of nearly 10,000. In July, an arbitration panel awarded Honolulu police officers a four-year benefits package worth $200 million. Yet to be determined is how much firefighters will receive once their arbitration award is announced in the coming weeks or months.

"I think the chances are it's going to be similar to the police, maybe better, (and) that's going to increase I think the margin of debt and the taxes that have to be raised to deal with that," said Cayetano.

Carlisle on the other hand, a former city prosecutor who served two years as mayor, believes rail and transit-oriented development will provide the fuel to supercharge Honolulu's economy for generations to come.  

"That's the future, plain and simple," he said. "If we use transit-oriented development correctly and appropriately, it's going to be exactly like the other great cities in the world."

Like many of his fellow rail supporters, Carlisle says the elevated rail line from East Kapolei to the Ala Moana Shopping Center will help keep urban sprawl at bay, and allow areas like Oahu's North Shore to remain country.

"If you look at the big picture, this is infrastructure that will be great for our kids, our grandchildren and our future and for this island," said Carlisle. "The actual land on this island will be better served with a rail system."

Still, as much as they disagree about rail, Cayetano and Carlisle do agree on the need for civil service reform. Both say city taxes and fees will continue to climb into the future if something isn't done to control the benefits package city workers currently receive.

"The way things are going, Honolulu may face bankruptcy one day," said Cayetano. "If not, taxes are going to be increased and then we're going to have an exodus."

"The cost of living has to do with essentially, the collective bargaining that's been done and the raises that have been given," added Carlisle. "If we don't look at those two monsters and don't do something about it, we're going to have real serious problems."


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