City budget rejects tax hike
By Robbie Dingeman
Advertiser City Hall Writer
Honolulu Mayor Jeremy Harris yesterday unveiled a $1.1 billion city budget that does not raise taxes or fees and concentrates on basic city services while restructuring some debt to reduce payments now.
Harris is sending to the City Council a spending plan that includes a $475.5 million construction budget for the upcoming fiscal year. He sees no need to increase real property taxes, sewer fees, license fees and other user charges.
"We've been able to achieve running the city with lower taxes by basically holding the line on city expenses," Harris said.
The economic slump that followed the Sept. 11 attacks caused a decline in tax revenues and a need for a modest budget.
The operating budget is $37 million, or 3.4 percent, larger than the current budget. That includes $24 million in negotiated pay raises for 8,100 city workers that include police and firefighters as well as white-collar and blue-collar workers.
But the proposed construction budget of $475.5 million is more than $100 million less than last year's $579 million capital improvement spending budget.
Council Policy Chairman John Henry Felix praised the budget for its emphasis on public safety and its policy of leaving positions vacant to save money without layoffs. But he had some concerns about other proposals to save money.
Felix questioned a plan to transfer $60 million from the sewer fund to reimburse the general fund.
"I think the sewer fund should be left alone because we're behind schedule and we have a timetable to follow to come into compliance," he said.
Felix was referring to improvements required by the courts to bring the city into compliance with federal environmental guidelines. A failure to meet deadlines could send the city back to court and cost more money.
And Felix questioned the wisdom of another year of restructuring debt.
"In the long term, you're going to pay more," he said. "We're continually refinancing debt and not doing the right thing and paying it down."
As in the current budget, the construction spending plan focuses primarily on core city services such as wastewater, initiatives designed to improve garbage handling, transportation and parks. Harris had described some of the refuse and recycling proposals in his State of the City address in January. They include a 50 percent expansion of the city's H-Power garbage-to-energy plant to help reduce the amount of rubbish that needs to be buried in landfills.
This will be the second year of a three-year plan to lower the real property tax rate for apartment and condominium owners. Under the plan, that rate will drop by 28 cents to $3.93 per $1,000 value, which would amount to about a $49 break for an apartment valued at $175,000.
The current apartment rate is $4.21 per $1,000 value. If the plan is completed, the following year the apartment rate will end up at the single-family home rate of $3.65 per $1,000 in value by the fiscal year beginning in mid-2004.
Owners of high-rise homes have complained for years that it is unfair for them to pay higher property taxes than residents of single-family homes, especially because many pay for their own garbage collection, a free city service in single-family residential neighborhoods.
City Council Budget Chairwoman Ann Kobayashi had yet to review the budget yesterday afternoon. She did say that she would be carefully reviewing the proposed transportation spending on the proposed Bus Rapid-Transit system.
Kobayashi questioned the wisdom of an investment of $65 million to run the first leg of the system from Iwilei to Waikiki, when the commuters facing the worst traffic are those driving from Central and Leeward O'ahu.
And Kobayashi wonders how removing lanes of traffic on busy streets such as Kapi'olani and Dillingham boulevards will help ease congestion.
"I would have voted against it," she said.
Councilman Jon Yoshimura said he will be watching to see how closely the leadership of Chairman John DeSoto monitors and critiques spending in the wake of complaints that Yoshimura led a Council that rubber-stamped the proposals of the Harris administration.
"I think that it's just a bunch of political hogwash," Yoshimura said.
The Council is required to pass the budget bills by June 15.
Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 525-8070.
