Kent, Hamada explore the many ways lawmakers waste money
from Grassroot Institute of Hawaii, June 29, 2023
Housing, the Honolulu rail, the Aloha Stadium, homelessness and the 64% pay raise for Honolulu City Council members.
Those were some of the topics Institute Executive Vice President Joe Kent talked about during his latest visit with radio host Rick Hamada on News Radio 830 KHVH.
Regarding the rail, Kent urged Hamada’s listeners to “step back and always remember where this project came from.”
He said the project was originally projected to cost about $3 billion and be fully operational by 2019 but now has a price tag of at least $10 billion and won’t be completed until 2031.
He also said the rail was originally slated to run from Kapolei to Ala Moana, but for now is going only as far as Aloha Stadium, and the stadium isn’t even operational anymore.
In addition, Oahu taxpayers are on the hook for about $100 million a year in debt interest payments and another $100 million or so for ongoing, and the ticket prices have gone up from $1.50 to $3 — an amount that still won’t cover the cost of each passenger ride.
“For every $3 ticket that you buy, taxpayers [will be] paying $15 for the operation, construction and upkeep of the rail,” he said.
Regarding the 64% salary increase for Honolulu City Council members, Kent said “the basis for that was because they say, ‘We’re a full-time council.’ But they’re a full-time council because they act like a full-time council. I didn’t ask them to act like a full-time council.”
He added: “There’s no evidence that a busybody council produces better results, especially if they’re passing laws and regulations to get in the way of progress. … So, actually, I like the part-time council concept.”
TRANSCRIPT
6-22-23 Joe Kent with host Rick Hamada on News Radio KHVH 830 AM
Rick Hamada: Joe Kent is with us. Brother Joe, how [are] you doing?
Joe Kent: Good, good. How are you?
Hamada: Pretty good. Not bad. I’m wearing my Seattle Kraken T-shirt.
Kent: Oh, awesome.
Hamada: Commemoration of the sports show today. But glad you’re with us here. Recent travels, yes?
Kent: Yeah, I went to Minnesota and, you know, they have this grocery store there called ALDI. Have you ever heard of it?
Hamada: Yes, they do. Oh, yes.
Kent: [laughs] It’s like the cheapest grocery store …
Hamada: Ever.
Kent: … in the nation. And I don’t think they could survive here in Hawaii somehow, but yeah. My wife went bonkers there. Like, you know, she’s just conditioned to, whenever there’s a sale, fill up her grocery cart.
So, I think we just filled up every grocery cart in the store there. [laughter] I said, “You can’t take all this food home.”
But, you know, it just reminded us how low the cost of living is on the mainland compared to here; although they think it’s high, which is funny.
Hamada: Yeah.
Kent: But, you know, the cost of living goes down by half or even three-fourths, and if you move to the mainland, your salary might go down by 20%. But you still win in the long run.
Hamada: Right, right.
Kent: And that’s something a lot of people here have to stomach, you know, and think about.
Hamada: Yeah. It’s hard to make that lateral move.
I mean, ALDI, by the way, they have everything. And my mom used to shop there and buy wine, which was interesting. You weren’t quite sure exactly but it was only $1.49 a bottle. So you kind of like … It didn’t matter.
Kent: Somehow it tastes better. Yeah.
Hamada: Yeah. Once again, very quickly, tell us about Grassroot Institute of Hawaii.
Kent: Sure. We’re a nonprofit research organization that focuses on individual liberty, economic freedom and accountable government. And so we’re government watchdogs.
Hamada: We appreciate you very much because in the days in which we have lived and continued, we desperately need this information.
I’d like to start with Gov. Josh Green.
Kent: Sure.
Hamada: 245 initiatives that reached his desk; some are signed, some are not. However, there’s one area … And if I have a conniption fit, I want to let you know, it’s my personal opinion. I don’t want to drag Joe into some of my angst. But it has to do with affordable housing, and the myriad of bills — now acts — that the governor has supported.
I just want to go through the premise of this. I was looking at the contents and a lot of it, most of it, has to do with support. I get it. It has to do with support for housing, to help those who are unable. I maintain that there are others of us who struggle.
As you indicated, [with] cost-of-living issues. And it’s interesting that when you speak with some folks, survival is the benchmark; just get by and you’re doing great.
We have somewhat of a mentality that says if you can just get to the next day, you’re lucky you live [in] paradise. I have a big issue with that.
Can you walk us through some of the affordable housing initiatives that have been signed? And please cut to the chase.
Just how much money are we spending of the public’s taxes for affordable housing?
Kent: Well, this year it’s about half a billion dollars — about $500 million for affordable housing.
Hamada: Yeah.
Kent: You know, that’s in one sense good because you think, “OK, well they’re going to finally build housing,” but then, you know, we’ve heard this before. Like last year they spent a billion dollars on affordable housing and we’re scratching our heads hoping and waiting for those chickens to come home and roost.
But anyways, these bills were designed to provide more subsidies and more housing projects.
‘They say that they’re also designed to clip regulation, but it’s less of a clip and more of a snip in some places.
So, now one of the bills was the Singapore leasehold bill. It’s a trial project. It’s about 10,000 units. This is basically [where] the government is owning the land and if you buy it, you don’t really own it. You own it in a sense for 99 years, but you can’t pass it on to your children. And it’s hard to build wealth on that.
I mean, think about any business owner; [they] will tell you a lot of the capital that they came up with to invest in their first business was from their house. You know, that was their asset and they could borrow against it and use that for a down payment or for an investment elsewhere. And it helps them move up the housing ladder.
To what you’re saying, you know, one perspective of housing is if we can just get people to survive, right? Then we’ve accomplished something. But the other perspective is: There’s this whole housing ladder.
And you know, people when they buy their first house, then after a while they move into their second house and they might sell the first house or they might keep it. And it’s a ladder that leads to more prosperity for individuals.
You know, it’s just like my wife and I: We’ve got a little one-bedroom house and we have a two-year-old daughter, you know. It’s, like, time to get two bedrooms, right? But, you know, should we sell the first house or keep it? I don’t know. But anyways, we’re on our way up the housing ladder.
Hamada: Right.
Kent: And so part of these leasehold properties, the problem with them is sometimes they lock people in the home. You know, there’s no real incentive and you can’t really borrow against the home and everything and move up the ladder. So that’s a long-winded way of saying there are some problems with that program. But you know, it’s a trial run so we’ll see what happens.
Then there’s Act 94. It’s a return-to-home pilot program for the homeless — that got lumped in with the bills that were signed yesterday. Basically, there’s this idea that homeless people are being sent here from other states, and so now we’re gonna send them back.
So, I’ve never seen any hard data on how many homeless are coming to Hawaii from other states — although I do know that it is happening. But anyways, they’re gonna … That’s an interesting program. We’ll see what happens there.
And then there’s another one — Act 98 — which is a rental supplement.
So in all and all, this is supposed to create 60,000 affordable homes, but we’ll see.
Hamada: It’s interesting. And Act [98], the Hawaii State Supplement Program, is specifically targeted to those of 62 years and above. And the intent is to stave off — for those that are struggling — stave off, subsidize, make sure that they have housing. I get it; I’m 62 in November. I would love to have some subsidy for my house payment, but none.
Kent: Yeah.
Hamada: Can you speak to the ideology that says: if you do not have, we will give, and if you have, we will give yours?
Kent: That’s right. I mean, Hawaii has the highest welfare benefits in the nation. If you compare our welfare and subsidy benefits to all other states, we give out the most.
But there’s a principle in economics that is: What you pay for, you get more of. And so if you pay for [the] homeless, sometimes you get more homeless. You know, if you pay people who are disadvantaged, sometimes you get more people who are disadvantaged.
And so, wishing upon the government genie, sometimes you get your wish, but there’s also a bad thing that comes with that sometimes.
Hamada: I know that there’s a lot that we can cover with this, and we’ll continue to do so. But thank you for establishing [over] the last two years that our state government [and] our local government has expended $1.5-plus billion dollars for affordable housing.
Kent: And that’s just the state too.
Hamada: Yeah. And that’s just the state.
And then if I can transition to homelessness, same kind of question, over the past two years as a good range:. How much have we expended under the banner of homelessness and, in conjunction with the number of chronic homeless individuals that have been identified and the latest PIT [point-in-time count]?
Kent: I don’t have those numbers at my fingertips, but I do know — I did look at the trend lines of them. And actually, the homeless count — the point-in-time count — is going down over time.
You know, [in] 2016, we had the highest homelessness rate in the nation. If you remember down in Kakaʻako, the [Kaka‘ako] Waterfront Park, there was a … You know, they took pictures of that. It was like on The New York Times or Wall Street Journal and all of that.
And the homeless situation seems to be getting better and better.
At the same time though, those the point-in-time counts are sometimes dubious. It sometimes depends if it rains the day that they count the number of homeless there are. So, even the people who put those numbers together sometimes are cautious about them.
But, you know, if you take it at its face value, it seems to be getting slightly better.
Hamada: So, I’m going to say one thing and we’ll move on, because there’s a homeless service center that just opened up down the road from us. It’s been on hold for about the past year. However, there was a statement that was made by Dr. Jim Ireland of the city, who said, “As soon as somebody walks through the door, we’re going to be able to help them the rest of their lives.” And that’s a quote that I found in a news report.
I shudder at this: That it is lifetime support and subsidy. There’s no temporary. It’s not just a safety net. It is a way of life. Joe, I can’t really wrap my feeble head about or around this idea.
Kent: Well, and the other piece of this is even if you want to help the homeless in Hawaii, it’s hard because of government regulation.
I mean, the governor just built his homeless kauhale near Queen’s Hospital. And, you know, that’s a good thing. I have seen a lot of homeless out there. And, OK, I hope this helps.
But he had to waive many regulations and restrictions in order to build those homeless kauhales.
Remember, he issued a homeless proclamation — an emergency proclamation — which was supposed to waive a bunch of like 22 different regulations that get in the way. You know, if we’ve got 22 regulations that get in the way, why do we need an emergency proclamation? Why not just cut those regulations outright?
And so we’re doing actually some research about that. We’ve got our team of researchers at Grassroot Institute working on answering that question. And we’ll be back when we have an answer for you about that more of like, which regulations are we talking about here?
Hamada: It is 8:49 in the morning. How can we connect with Grassroot Institute of Hawaii?
Kent: Go to grassrootinstitute.org. And actually, if you’re on Instagram, go to Grassroot Hawaii. We just passed 10,000 followers on Instagram yesterday.
Hamada: Oh, excellent.
Kent: So, we’re doing a lot of fun stuff there too.
Hamada: Really appreciate that.
Honolulu rail?
Kent: Yeah.
Hamada: The debut is a week from tomorrow.
Kent: That’s right.
Hamada: However, there is still the internal machinations of this project. What is emerging is, more expenditures.
Can you share, please?
Kent: Well, we have to take a step back and always remember where this project came from. You know, I mean, 2007 they said it was gonna be what, $2 billion, $3 billion?
Hamada: $3.7 billion — I remember.
Kent: It was up to $12 billion, you know, and then it went back down to $10 billion because they aren’t going all the way to Ala Moana now. But that is a huge overrun.
It was supposed to be done in 2019. Now it’s gonna be done in 2031, although they’re opening it.
So we also have to think of it in that perspective.
And all this time, it’s been racking up all this debt. And that debt is problematic for the city because they don’t want their bond rating to get hit.
We actually have a debt limit in the city of Honolulu where it says if you have too much debt, then, you know, it’s not allowable to take on more debt.
But the problem with that is they exclude rail from the debt calculation. And the reason they do that is so that they can get a more favorable bond rating.
But the rating agency, Moody’s, just said, “Hey, we see that debt that you’re sweeping off the books. We’re counting that too.”
And so they downgraded Honolulu’s credit rating. And so, now that means our interest payments are gonna go higher — you know, interest rates are already going up — and they’re taking out even more debt now — $200 million more that they’re asking for.
It’s kinda like a credit card: You don’t want to pay all this interest. And that’s what we’re doing. We’re paying $100 million a year just on the interest, you know — just on the debt service.
Hamada: Debt service, yeah.
Kent: And so, now think about the cost of maintenance and upkeep of the rail too — that’s over $100 million too.
So, you know, this is a really expensive project and the debt portion is …
You know, what I think they should do is they should make a policy where it includes that debt in the debt-limit calculation. And that would actually put a cap on how much debt they could take out, which would protect taxpayers because they’re the ones who are gonna be hit in the long run.
Hamada: So just an editorial comment on my own: I will fit into a pair of 32-inch waist slacks before that even is conceptually possible. Because what you’ve demonstrated — and over time with reporting on this issue — is that it is not the stewardship of the taxpayer; it is the full funding to ensure that forward progress occurs. Now, it’s culminating, of course, with this Friday.
But please, all of our friends understand, first of three phases, decades behind and billions ahead.
Kent: That’s right.
Hamada: That gap of over five-plus billion dollars, that is acceptable as the wash fund or whatever it is should not be lost on. Go ahead, Joe.
Kent: Well, and also you know they increased the ticket price; it used to be $1.50 now it’s $3 per ticket. But, think about what taxpayers are paying. You know, that $3 that you’re paying for a ride on the rail doesn’t actually cover the cost of your trip.
If you think about what taxpayers are paying as part of that, they’re paying $15. So for every $3 ticket that you buy, taxpayers are paying $15 for the operation, construction and upkeep of the rail. And so that’s like more than double, triple, quadruple, quintuple the cost of the ticket.
And it makes it … You know, the rail is one of the most expensive rail projects in the world. It’s the most expensive light-rail project in the nation per capita, and in the world, when you measure longer projects like over 5 miles, this is the most expensive project in the world in some ways. And taxpayers are paying for it.
They call it Skyline right now. But, you know, my wife said they should have called it “TheRail” — you know, “TheBus” — “TheRail” or maybe the “Boondoggle”, yeah.
[laughter]
Hamada: Boondoggle.
It is already 8:54 in the morning. I gotta see just how much time we have — just a few moments remaining.
Not that there’s intentional linkage but I’ll bring up two words that could cause all of us to have a flashback. And that is: Aloha Stadium.
Kent: Oh yes. Yeah. Aloha Stadium. You know, it’s funny that there is a linkage actually. The rail goes to the Aloha Stadium and so if you ride it next Friday, then the line will go all the way there.
The problem is, there’s nothing to do there. They’re blowing it up, right? And I made a little TikTok-Instagram video that blew up where, you know, it shows someone saying, “They’re opening the rail!” And then the person rides all the way to the stadium that’s just getting demolished.
But it is getting demolished and they’re thinking about building another one in its place, right? That’s supposed to cost … it was going to cost $800 million which, you know, makes me think, is this another rail? You know, is it gonna crack the billion mark?
But the governor now chopped that in half. He said, “No no we’re gonna only spend $400 million on it.” OK, that’s good. But they also had to chop the number of seats way down too. So now it’s only gonna have 20,000 seats.
But think about Ching Field, which is over by the University of Hawaii. That’s already built and it has 17,000 seats, and they’re hosting the Rainbow Warriors. And so, it begs the question: Why do we need the Aloha Stadium at all when we already have this other field that has pretty much the same amount of seat space?
So, is this just gonna be another waste of taxpayer dollars? And, you know, we’re getting used to it at this point.
Lawmakers say that we need the stadium to build housing. You know, we need the stadium to build business. But if you wanna build housing in business, then just build housing in business. You don’t need this other taxpayer add-on, and so … which would be a lot easier to do if we cut regulations.
Now I know that they’re pulling the rip cord on subsidies and spending too. That’s one way to do it. But as I said before, it’s similar to [saying], “Here’s a brick wall. Now we’re gonna pay you a bunch of money to try to get through it.” Just get rid of the brick wall! And there’s more than enough investment capital to improve our business and housing situation.
Hamada: We have about a minute remaining, which is plenty of time to opine and report about Honolulu City Council raises.
Kent: [chuckles] Not enough time. But those raises are to go up on July 1; it’s a 64% pay increase. The Council is going to $113,000 a year. The mayor is $209,000 a year. That’s the highest-paid council in the state.
And, you know, the basis for that was because they say, “We’re a full-time council.” But they’re a full-time council because they act like a full-time council. I didn’t ask them to act like a full-time council.
Just because they’re … I don’t want them to be busybodies, actually. You know, I want them to work part-time. There’s no evidence that a busybody council produces better results, especially if they’re passing laws and regulations to get in the way of progress.
So, actually, I like the part-time council concept. Let’s stick to that. But anyways, this is going through.
Hamada: How do we connect with you, Joe?
Kent: Grassrootinstitute.org, and you can get on our email list and find out more about waste, fraud and abuse in Hawaii, and how to build a better Hawaii too.
Hamada: There we go. Joe Kent, thank you so very much. Can’t wait till the next time.
Kent: Thanks so much, Rick.
Hamada: Thank you, Joe.