Tuesday, September 29, 2009

City Report Says Rail’s Tax Revenue Sufficient; Collections for FY ’09 $12 Million Above Forecast

This should put to rest the hand wringing in some circles about whether general excise tax collections will be sufficient to fund the local portion of the Honolulu rail transit project.

As the City correctly noted in August, when headlines trumpeted the alleged shortfall, the May report on which those headlines and finger wagging were based was outdated. Now comes the August financial plan, with updated information the City stands behind:

• Forecasts for GET surcharge revenues are approximately $200 million higher through Fiscal Year 2023. This projection takes into account the actual GET surcharge received in Fiscal Year 2009 was $12 million higher than the most recent estimate, along with assumed annual growth rates.
• Federal Funds through the Federal Transit Administration (FTA) will be sufficient for capital and financing costs not covered by GET surcharge revenues.

Not even included in those key findings are two other important issues -- the Council on Revenues’ projection for robust growth for the next six years, and the bids the City has received for project work that are 10 to 25 percent lower than forecast.

So what’s the lesson learned here for the average news consumer? It could be this:

Be wary of dire predictions about the rail project – especially when the source of all the Sturm und Drang is likely a rail opponent whose pessimism is channeled by an over-eager journalist.

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