Monday, September 10, 2007

Superferry and the state's financial liability

As we wait for Judge Cardoza's ruling on whether the Superferry must stop operations pending the outcome of an environmental assessment, House Finance will be looking further into the state's financial liability for the Hawaii Superferry. In 2005, HB100, the state budget bill, included $40 million for harbor improvements statewide to enable the Superferry to begin operations. The improvements were mainly to build ramps for on and off loading. As it appears that most of the improvements have been completed on all major islands, the money has been spent.

The $40 million was appropriated as reimbursable bonds, to be paid from Department of Transportation's special fund for state harbors. Harbor users and vendors contribute to the special fund; if and when the Superferry becomes operational, they will also contribute to the special fund. If the Superferry does not go forward, the state remains liable for the $40 million, but whether there would be enough funds in the special fund to pay for the bond obligation, without revenues generated from the Superferry, is the question. If not, what then?

1 comment:

sandwich said...

Regardless of what you think about the Superferry, the idea of being stuck with $40M in debt without a means to pay it back is definitely worrisome. I guess we could turn to an outside organization for help - the only thing is we'd have to rename the facility the Harry and Jeanette Weinberg Harbor.