What the Honolulu rail has taught us

by Keli'i Akina, Ph.D., Grassroot Institute, July 8, 2023

After years of delay, the Honolulu rail is finally open. Well, partly anyway.

The Honolulu Star-Advertiser reports that more than 71,000 people took advantage of the five days of free rides that marked the opening of the first 11 miles of the rail, officially named Skyline.

Despite a few complaints, the initial reaction has been fairly positive. Officials are optimistic about ridership numbers and are promising big things for the future.

In other words, we are in the honeymoon period of the Skyline.

This isn’t a bad thing. Regardless of your original opinion on the rail, we all hope that it is safe, well run and not overly burdensome in terms of cost or upkeep.

But at the same time, let’s not forget the lessons we’ve learned along the way.

Foremost: Government projects usually cost a lot more than promised. That is especially true for megaprojects such as the Honolulu rail. 

Sadly, the Honolulu rail’s cost estimates have consistently increased. From $2.6 billion in 2003, the final rail cost now is estimated at about $12.4 billion, making it the most expensive light-rail project per capita in the entire United States. Among projects over four miles long, it is the most expensive in the world.

Another lesson: There is nothing so permanent as a temporary tax. 

In the case of the Honolulu rail, the general excise tax surcharge that was implemented by the county in 2005 to help fund the rail was originally supposed to expire at the end of 2022.

In 2017, it was extended to Dec. 31, 2030. And now, in the rosy glow of the rail system’s half-opening celebrations, rail officials are talking about extending it again.

In addition, in December 2021, Honolulu lawmakers enacted a temporary 3% surcharge on the state’s 10.25% transient accommodations tax to help pay for the rail. For the first two years of the tax, only a third is to be used for the rail. After that, the amount will increase to a full half. If history is any lesson, look for that tax to be extended as well.

And another lesson: Be skeptical of everything public officials tell you.

For example, in 2003, we were told the rail would be completed by 2018. The estimated completion date now is early 2026 — or maybe it’s 2031, And that’s after the system was shortened from 20 to 18.6 miles. Instead of going from Kapolei to Ala Moana Center, now its end point will be in Kakaako.

As for the ridership projections, they have always been rosy, but transit ridership has been falling off a cliff in recent years — even before the COVID-19 crisis intervened and made it worse.

During the first five days of Skyline operations, ridership was free, so of course tens of thousands of people got on board to check it out. (I hear the views were wonderful). But on the first day of the rail’s regular service, when people actually had to pay to ride it, the number of passengers plummeted to 1,245.

Rail officials claim that number will increase over time. Meanwhile, most of the burden of paying for rail will continue to fall on Honolulu taxpayers. According to calculations from the Grassroot Institute of Hawaii, the actual cost to operate the rail per passenger ride — accepting the city’s estimate of 84,005 riders a day — is about $12.79, yet the fare being asked per passenger is only $3. 

So what other lessons have we learned from this experience? Here are at least two more:

>> Transparency and accountability are paramount.

If city rail officials are frustrated with the loss of public trust in the rail, they have only themselves to blame. Throughout its existence, the rail project has been notable for its resistance to transparency and accountability. The lawsuits and investigations that have dogged the rail have only reinforced the impression that important information has been hidden from the public. 

In the future, public works projects should strive for transparency in their decision-making and accountability in their process. Regular audits should be built into the system, not postponed until public demand becomes overwhelming. It is likely that the rail would have enjoyed greater public support if the project manager, the Honolulu Authority for Rapid Transit, had been more transparent.

>> The more popular and exciting the idea, the more you need to beware of boondoggles.

Projects like the rail, the new Aloha Stadium or gargantuan public housing projects are exciting. They often include promising, forward-looking proposals that could mean great things for our state. But that’s when we need to be especially cautious and avoid getting swept away by an interesting idea.

Raising issues of cost and infrastructure may not be popular, but it’s important. The way to avoid future boondoggles is to ask the right questions — and learn from the past.

I hope the rail will be the last large government project we embark on without sufficient transparency, firm budgets and accurate timelines. But, ultimately, that’s up to us.