Our recent expansion of news coverage to the Aloha State of Hawaii led to a heated battle between my colleague Joe Florkowski in our Monrovia office and me over who would be based there as bureau chief. But it was a fruitless battle since the McGraw-Hill Construction powers-that-be nixed any notion of relocation. Bummer.

However, it did get me motivated to find out what’s going on in Hawaii. And what I found out was there was a real battle going on over a proposed elevated commuter rail line in Honolulu.

Two things recently happened that could spell the doom or delay indefinitely the start of the new rail system.

The plan features a 20-mi line that will run from East Kapolei to Ala Moana. Cost is estimated at this point to run $5.4 billion, of which the city expects the feds to pick up $1.4 billion of it.

First of all, the new line is not in line for any American Recovery and Reinvestment Act stimulus funds. Transportation Secretary Ray LaHood reports that transit projects around the country will receive $742.5 million in ARRA funds. The grants will go toward projects for which the Federal Transit Administration has already entered into multi-year federal commitments known as “full funding grant agreements,” in Arizona, California, Colorado, New York, Oregon, Texas, Utah, Virginia and Washington State.

The ARRA grants do not increase the federal commitment to the projects, but expedite funds committed under the agreement between the federal government and the transit agencies.

(In California, the Metro Gold Line Eastside Extension project will receive $66.7 million.)

Some federal money may be coming Honolulu’s way in the next couple of years, depending on if the city can get federal funding approvals. The city was not even funded for preliminary engineering, which is the first step in getting the project off the ground.

Meanwhile, the Federal Transit Administration issued a report saying that more than a third of the assets at the nation’s seven largest (and some of the oldest) rail transit agencies are in “marginal or poor condition.” These assets include trains, stations and control systems. The agencies are located in New York, Boston, Chicago, San Francisco, New Jersey and Washington, D.C.

The FTA estimates that fixing these assets will cost a total of $50 billion.Honolulu was not included on this list because, obviously, it doesn’t have a rail line yet, but Mayor Mufi Hannemann and the city council are expecting to have one in operation by 2013.

Cliff Slater, the chair of Honolulutraffic.com, a nonprofit citizen taxpayer group that opposes the rail plan, says the city council may go ahead anyway and authorize a 6-mi segment, funded locally, and forgo federal funds. And that has touched off a mini-rebellion.

More on this as it develops…