Dial Back Borrowing for Road Repairs

Our View by the Editors of the Honolulu StarAdvertiser – March 31, 2013 (subscription required) – full text of the editorial is shown below:

The roads in Hawaii, where it’s high season for driving all year round, show the scars of their overuse. On Oahu, where 80 percent of the people live and most of the visitors stay for at least part of the time, the streets and highways are especially pockmarked, the drivers either swerving to avoid a car-damaging jolt or enduring the bumpy ride.

Mayor Kirk Caldwell has made fixing the roads, and putting them on a more sustainable schedule of repair and maintenance, a big part of his inaugural agenda at Honolulu Hale.

He has resolved to raise the city’s investment in road repairs significantly through the floating of $150 million in bonds yearly over the next five years. His first idea for paying back the loan — adding a nickel to the city’s gasoline tax — got shot down by the City Council.

They were right to do that, especially given that the city has barely been able to push through even half that amount of construction spending. The mayor is aware of the clogs in the contracting pipeline and has vowed to put his own shoulder to the wheel and push, bird-dogging contracts already issued to make sure the repair crews get going.

That kind of personal attention and determination is great to see from the mayor, and in a city where maintenance was deferred for so long, righting the ship undoubtedly needs Caldwell’s hands-on approach.

But it’s not clear yet that this is all it will take. It would be prudent to see how much the new guard at City Hall can shorten the timeline for contracts before Honolulu adds to its indebtedness.

The mayor is right that historically low interest rates make this a good time to borrow, but these new debt-service obligations will be on the books for some time, and ramping them up should be done on a more modest incline.

The Council should urge the administration to lower the bar on bond authorizations, probably to about the $100 million level. This would provide ample funding for a fairly aggressive road-repair schedule. It could accelerated later if, as the mayor hopes, he can direct contract spending around the current logjams and out the door at a more productive rate.

Star-Advertiser transportation writer Marcel Honoré dug into Honolulu’s chronic road problems last week, chronicling the issue in a series accompanied by detailed road maps of each island section. Photos of many of the most deteriorated potholes spoke for themselves.

But the numbers spoke volumes, too. The Washington, D.C.-based nonprofit research firm TRIP compiled federal data and ranked Honolulu as having the third-worst roads of the nation’s cities. A stunning 43 percent of Oahu’s major roads were rated as being in poor condition, according to 2011 data, with the average cost to drivers for car bills estimated at just under $600 a year.

This is real money to most households, which explains why Caldwell feels such pressure to deliver on this issue. And while taxpayers should appreciate the intent and ambition, the program of improvements should be extended over a longer time frame to make sure the fiscal hole doesn’t go too deep.

That said, the discussion should continue on alternate strategies for raising revenue to pay off Honolulu’s roadwork bills. The proposal by City Councilman Ikaika Anderson to enhance revenues through a flat vehicle highway user fee would actually be a more costly hit on car owners such as the elderly, who don’t drive very far, the mayor said. This may be a down side, but in any case the idea deserves fuller debate.

Further, the mayor raises a valid point about the counties’ need for more revenues from the transient accommodations tax, the “hotel room tax” also known as the TAT. The Legislature, in crafting its final spending plan for the biennium, should raise the cap on how much of the tax goes to the counties. Honolulu in particular is facing enormous costs associated with the visitor industry, everything from the road upgrades to programs aimed at addressing the homeless encampments in Waikiki. Raising the cap on the TAT is necessary to provide the counties with the budgetary leeway that they need.

Oahu residents ultimately should not be surprised at how low Honolulu roads rank nationally. In a place where a million people spend 12 months a year pounding such a limited amount of pavement, the degradation of the road surface inevitably would need far more care than it’s received in recent decades.

Finally, there’s movement to turn that around. Whatever final formula of revenues and expenditures is devised, Honolulu must take a more realistic, clear-eyed approach to managing this particular urban problem.

 

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