Recent Rail Tax Revenues a Pleasant Surprise for City
The rail tax numbers are in, and the city’s optimism might actually be warranted this time.
In fact, one could even argue that the press release announcing the figures is a little understated.
The Honolulu Authority for Rapid Transportation on Thursday announced that its haul of General Excise Tax surcharge revenues exceeded the targets laid out in its most recent financial plan.
When Civil Beat looked at the city’s last financial plan, we determined that its projections for tax revenues were optimistic; that Mayor Peter Carlisle‘s statement that the city was 99 percent on track was misleading; and that the city was looking at the numbers through rose-colored glasses.
But a new financial plan published in April gave Honolulu Hale and its financial team another crack in the economic predictions game. This time, they took a more conservative approach.
HART said Thursday that it pulled in $49.8 million in GET revenue for the fourth quarter of Fiscal Year 2011, giving it a total of $179.1 million for the fiscal year. That was $15 million higher than the projections included in the .
“This is good news, particularly in this difficult economy,” HART Interim Executive Director Toru Hamayasu said in the press release. “We’re doing better than we had anticipated in our updated financial plan. Strong GET collections will help us keep our finances on track and deliver this project on time and on budget.”
But that updated financial plan had actual, historical collections as the figures for the first two quarters, meaning that the $15 million difference came in just the last six months. Parsons Brinckerhoff’s Mark Scheibe explained to Civil Beat that analysts tried to predict where the economic bottom was going to be and how long the recession was going to last. He said the economy has turned — at least in terms of GET revenues — faster than anticipated.
By saying the $15 million surprise is 9 percent higher than projections, and by comparing the $715 million in actual collections to date against the $700 million projected collections, the city is actually being modest. That $15 million gap would represent about 17.5 percent of the city’s $87 million projections for GET revenues over the last two quarters — the two quarters that weren’t already in the history books when the financial plan was written.
To be fair, the city is just now breaking even as it relates to its original financial planning.
And because the city hasn’t backed off its ambitious original models for total GET revenue pulled in between now and 2023, the conservative estimates of 2011 are going to have to ramp up sharply to make up the difference. Optimism is still an appropriate word to describe a plan that, as we wrote in December, does not anticipate any recessions, bubbles or serious hiccups for more than a decade.
But today’s GET revenue report is “good news” for rail fans.
