In addition, a key pledge — that the medical school would not require added state funds to cover costs — may not be fulfilled for several years. That promise was based in part on plans to boost grant awards to $100 million or more, which in turn would generate enough money to cover the new facility's overhead costs.

"The fact is we are actually doing what we said we were going to do," said Gary Ostrander, interim dean for the medical school. But "maybe not at that grandiose scale."

To be sure, the medical school has a positive impact on healthcare in the state. The first crop of 62 students is expected to graduate in 2010, and 60 percent of medical school graduates here go on to practice medicine in Hawai'i, Ostrander said.

The $73 million in grants to the school in 2006 was almost entirely spent locally, with the bulk going toward salaries.

"These dollars are being spent at the local 7-Eleven, being spent at movie theaters," Ostrander said. "That's a significant economic driver."

The health and economic benefits of a local medical school exceed the burden on state finances, he said.

"Healthcare would suffer tremendously in this state if there wasn't a medical school," he said.

As for the goal of $100 million in grants, Ostrander said, part of the difficulty in reaching that goal has been a more competitive climate for grants in the wake of Sept. 11 and Hurricane Katrina.

In addition, the medical school has suffered from a lack of focus during a prolonged search for a permanent dean, Ostrander said. Cadman resigned in 2005 for health reasons, and the appointment of a permanent replacement dean has been delayed by a change in university leadership.

DIPPING DEEPER

Lawmakers gave UH the go-ahead to build the medical school in hopes of bolstering the state economy in the aftermath of the Sept. 11 terrorist attacks. The medical school was given a portion of a state settlement with tobacco companies to repay $150 million in construction bonds.

The new school was then supposed to operate without costing the state any more money than it cost to run the university's old medical school. However, earlier this month Gov. Linda Lingle signed a new law expected to provide the school with an added $3 million to $4 million a year for the next four years.

That's on top of $7.4 million in supplemental, additional budget funds already given to the medical school during the past two years. That means that by mid-2011 the state will have given the medical school an estimated $20 million to cover increased operating costs.

Some lawmakers are losing patience with the lack of follow-through on the university's original promises. Those promises were the basis for much of the Legislature's support for the project, said state Rep. K. Mark Takai, D-34th (Newtown, Waiau, Pearl City).

On Jan. 27, 2004, Dobelle promised legislators that by September 2005, UH would raise $150 million to finance a new Cancer Research Center to be built in Kaka'ako next to the medical school and to retrofit the Biomedical Sciences Building on the Manoa campus.

Dobelle said he would get the money from federal, private and UH Foundation sources. "We're committed to that and confident of that," Dobelle told lawmakers at the time.

Takai said, "We were led to believe very early on that they would come up with a $150 million match (and) ... they would pay for operating the new facility. I believe we need to support the university. ... All I ask is that when promises are made, promises are kept.

"I would expect that in four years the UH medical school will no longer need additional money."

'NEVER' A BUSINESS PLAN

In hindsight, key projections, including the amount of grant money that could be used to run the school, were off-base, Ostrander said. From the outset there was a lack of basic understanding of how much the new school would cost and how much money it would bring in.

"To the best of my knowledge to this day there was never a business plan," for the medical school, said Ostrander, who has run the school for about eight months. "If there was one I have not seen it."

The school doesn't have a firm grasp on operating costs in part because its facilities aren't fully utilized and because of the transition from older facilities on the Manoa campus into the new Kaka'ako campus, Ostrander said.

Meanwhile, the school's increased reliance on tobacco settlement money ultimately means less money for smoking cessation programs. Currently the state receives about $35 million a year to settle healthcare claims connected with smoking. Of that, 24.5 percent goes into a state emergency "rainy day" fund, 35 percent goes to the state Department of Health, 28 percent to the medical school and 12.5 percent into a tobacco prevention fund.

Until this month, the money not used by the medical school to pay debts had to be returned to the rainy day and tobacco funds. Under the new law, excess money can be used to pay medical school operating costs instead.

The U.S. Centers for Disease Control and Prevention has said Hawai'i doesn't spend enough on tobacco prevention. Hawai'i should spend $11 million to $23 million a year to have an effective tobacco prevention program, the CDC says. But the state spent just $9.1 million on tobacco prevention in fiscal 2007 (ended June 30), according to the Campaign for Tobacco Free Kids.

Among those opposed to the new law was the Coalition for a Tobacco Free Hawai'i. Kathy Harty, its interim director, said the group already doesn't get enough money for its programs:

"We believe these should be funded rather than filling in a deficit for the medical school."

Reach Sean Hao at shao@honoluluadvertiser.com.