There are many reasons to fight rail, and I’m not by any means justifying rail development, but in terms of the current rail debate, I think it is important to approach how the cost of rail impacts Hawaii’s GDP, and use this as an opportunity to not only question the dubious assertions promoting rail, but to challenge the current accounting of what is deceptively construed as “sustainable growth” in Hawaii.
Rail, like highways and bridges, ports and airports are considered a fixed asset, and it is accounted for differently in GDP from the imposition of let’s say Walmart or Monsanto which is retail trade or private industry, respectively. To note, there is a matrix of economic indexes that are used to measure national growth– including unemployment– and the definition of this accounting system is what the US Bureau of Economic Analysis (BEA) uses and is defined by the UN System of National Accounts. The purpose for this accounting standard is to provide the data for international trade and currency valuation.
Building upon the value of fixed assets provides a measurement of GDP that has “projected” value which is conventionally derived from the stock of tangible use– stuff like rail, machinery, vehicles & equipment, installations & physical infrastructures, the value of land improvements, and buildings, etc. This projected value is based on an array of metrics, one of which predicts value on potential future investment projections.
Although there is some deviation in the accounting definitions between the way the state defines GDP and the national definition, the importance of national accounting is that it is through GDP that international trade and currency valuation is measured, thereby directly influencing international investment and development.
Back to rail, there are other ways to account for public transportation other than by revenue, because if we account for the benefit of rail only according to the revenue made by ridership, then obviously this would be an unwarranted cost to taxpayers as ridership would never make up the cost of the rail. And although it is true that taxpayers are impacted by these kinds of developments, I think it is generally overdetermined to think of the rail project the way we think about retail costs, (where the price of widgets directly correlate to market costs).
Admittedly, I don’t know the actual value that rail would be accounted for as a state asset, but the value of rail for attracting international commercial investment is considerable, and I suppose as the state would argue, accounting for anticipated profit though infrastructure development is what gives the rail project its accounted value– not ridership.
If this seems counter-intuitive, it is, however at this point in the rail debate, it may be worthwhile considering that since the state accounts for rail as a fixed asset, we may not want to focus on its cost to taxpayers as the main thrust in this debate. Rather, we should demand for a fixed percentage of that accounting from investor development go into a peoples’ fund for public use initiatives like public housing resources, public utility reform, public ag or the like, and have that legislated for all development projects that are tied to tax-payer funded assets.
The caveat being that I’m unsure of whether these kinds of publicly held regulations are legal in bilateral investment treaties (BITs) or regional trade agreements like the Trans-Pacific Partnership which is currently being negotiated for the further benefit of the investment regime. The million dollar question is, how do people protect their resources and prevent unwanted development when by treaty, national or state regulations cease to be effective against international investment regimes?