Commentary
Debt bomb could blow up in next mayor's face

By Bob Dye
Kailua-based writer and historian

A woman can change her mind, so Mazie did. Ain't no big thing. Unless, of course, you're one of the guy wannabe mayors: Duke Bainum, Frank Fasi, Mufi Hannemann, Keith Kaneshiro.

Lt. Gov. Mazie Hirono says she will run for mayor of Honolulu on Nov. 9. The next mayor, whoever that is, is likely to face painful decisions brought on by profligate borrowing to finance capital improvements. Advertiser library photo

Your votes from women could be small.

But there might be no votes at all.

Before Mazie decided to run for mayor of Honolulu instead of governor of Hawai'i, Mufi claimed his poll showed him in the lead of the mayoral contest, Duke second, Frank third and Keith last. Another candidate's poll confirmed that ranking. But all bets are off with Mazie now in the mix. Her name recognition, save for the legendary Frank Fasi, has to be as good or better than theirs, and probably her approval rating is, too.

How will the guys respond to Mazie's challenge?

As a state official, Mazie did girl things, they'll accuse, especially busying herself with schools and childcare. But a mayor has guy things to do: cops and robbers, fighting fires, digging sewers, hauling garbage, patching potholes. Nuts and bolts! Hands-on! It takes broad shoulders to be mayor of Honolulu. Remember the performance of the last and only woman mayor of Honolulu, Eileen Anderson, they'll remind us.

And the guys will say that they already know where the Honolulu Hale mens' room is: they all have experience in city and county government, and Mazie doesn't. And with the possibility of all new faces on the next City Council, their past experience will be needed to keep the city afloat in perilous times. With Mazie's lock on educational issues, they'll push economic issues.

But wait! Not every mayoral candidate has announced, so subjects for debate remain open. The already-crowded field in the special election will get more congested when the GOP's mayoral candidate X steps forward. Although Republican state Sen. Bob Hogue is no longer considering the nonpartisan mayor's race, you can bet there will be some Republican as popular as him running. And whoever it is, with the state's economy on the edge of recession, that candidate will stand firmly on a platform of fiscal responsibility.

Honolulu has a $2 billion debt, and counting.

GOP executive Micah Kane says that because of "sloppy management" by Mayor Jeremy Harris, the next mayor already is in deep financial trouble. "Harris has raided the sewer fund. He's taken out 90-day notes to put off debt payments. He's like a college kid: When he maxes out one credit card, he gets another card to pay off the first one."

"There is reason to be concerned," says Lowell Kalapa, head of the Tax Foundation. "The Harris administration has been bread and circuses. Spending has gotten out of hand. In a 15-year period, debt service has risen from 5 percent (of the city budget) to 17 percent. He's mortgaged away the future."

"Embracing a credit-card mentality is dangerous, fiscally irresponsible and will undoubtedly lead to financial disaster," Councilman John Henry Felix warns.

He explains: "Recent projects — including the Kapi'olani Park bandstand, the Central O'ahu Regional Park, Waikiki improvements and the Waipi'o soccer facility — caused the capital (improvements) budget to balloon from $163 million appropriated in fiscal year 1997 to $579 million budgeted for the current year."

Who is at fault?

"Any fault lies in the short-sightedness of us all: the citizens with their insatiable demands for more and their unwillingness to raise property taxes and fees, and elected officials who are too eager to meet their constituents' demands and to curry favor with them to win votes and re-election, or election to higher office," says Felix.

"As the city's capital spending grows, so does the annual debt and interest obligations. In the current fiscal year, the debt repayment obligation is $107 million, and by fiscal year 2005, the obligation will nearly double to $207 million.

"By 2012, debt payment will be more than $242 million," he contends.

Felix cautions: "The city's financial woes are further compounded by a substantial increase in costs relating to the city's aging sewer system." The U.S. Environmental Protection Agency has required Honolulu to make costly sewer improvements, he points out.

He says the signs of trouble are serious: "The city had to take a short-term loan of $53 million for its last debt payment of its general obligation bond."

Instead of incurring more debt, the city should "begin paying off the large debt it has created, which will require raising the real-property tax rates and increasing sewer charges," Felix suggests.

Will members of this council raise taxes?

"It's political suicide to vote for higher taxes," the veteran councilman observes.

Nevertheless, he says: "To be fiscally responsible, the city must increase revenues, primarily from real-property taxes and sewer fees, now. If the city attempts to avoid raising taxes, the problem will only get worse. As it is, if the city should satisfy this debt payment by using cash from real-property tax revenues, for the debt payment owed in 2005, real-property taxes must be raised by at least 25 percent. Furthermore, to pay for the sewer improvements, it is estimated that the sewer charge must increase an average of 10 percent a year beginning July 1, 2003, and continuing through the fiscal year beginning July 1, 2009."

Acting responsibly must not be left for the new mayor and the next council, he says. Felix calls for the Harris administration and the current council to immediately face the "the harsh realities."

The candidates for mayor and council should read his lips: higher taxes.

Bob Dye is a Kailua-based writer and historian.