Rise in vehicle tax predicted
By Treena Shapiro
Advertiser Staff Writer
Mayor Jeremy Harris expects the City Council next week to approve a 60 percent increase in the annual motor vehicle weight tax for the owners of about 545,000 passenger cars to pay for the arbitrated police contract.
"I assume they are or they wouldn't have told me to schedule the meeting," he said.
The council shelved the tax increase at its Dec. 3 meeting by a 6-3 vote, but Harris called members back for a special meeting on Christmas Eve after Council Budget Chairwoman Ann Kobayashi reached an agreement with city administrators.
Kobayashi earlier opposed the increase and suggested that the city use money from other sources to pay for the raises.
Kobayashi has not yet committed to supporting the weight tax increase, but yesterday said she was open to considering it.
Several others on the nine-member council reached for comment yesterday expressed support the increase, and only one, Charles Djou, refuses to consider it.
Harris said the key was agreeing to give raises to middle managers within the police, fire and corporation counsel departments to give them parity with the chiefs, deputies and rank-and-file, who have all been given wage increases this year.
"That was, I believe, what they wanted in order to meet in a special meeting and move this along," he said.
Kobayashi said the only way she would consider the increase was if the middle managers received a raise. "Otherwise it's not fair, everyone is getting a raise but them," she said.
Because the council did not act earlier, the city has already missed the deadline to increase the motor vehicle registration bills for January, so the first bills reflecting the increase would be due in February.
Under Bill 69, the motor vehicle weight tax for passenger vehicles would increase from 1.25 cents to 2 cents a pound, meaning owners of passenger vehicles in Honolulu would have to pay an extra $16 to $34 on their annual motor vehicle registration.
The bill also would increase the commercial-vehicle tax rate to 2.5 cents a pound from the present 2 cents.
The tax increase would bring in $5.5 million through June 30, and $13 million the next year, according to administration estimates. "That puts us very close to what the police increase is going to be," Harris said.
Police contract details released by an arbitration panel at the end of September would give officers a 4 percent raise in each of the four years of the contract, which along with health-fund payments and other benefits will cost about $66.4 million over the length of the contract: an additional $5.8 million this fiscal year, $12.7 million the second year, $20.7 million the third year and $27.2 million the fourth year.
Kobayashi said she wished the administration had provided the council with more information and given them more time to find the money elsewhere. "Property assessments have gone up, our credit rating has gone up," she said. "If only we had time and the information, we could find the money. There are all these other avenues that we never could look at because of the time constraints."
Council Chairman Donovan Dela Cruz said he wants to eliminate all other possibilities before raising the weight tax. "Property assessments are high, we're still waiting to get information on the carryover, so we need to consider all those things, too," he said. "I'm still looking for a solution I'm comfortable with — not necessarily me, but my constituents."
Dela Cruz and Kobayashi both pointed out the administration has yet to release any figures on how much savings in the budget can be carried over into the next fiscal year. Usually those numbers are given to the council in December, Kobayashi said.
"Hopefully on Christmas Eve, the present is that they have carryover enough to cover it," Dela Cruz said.
But Harris said that is not likely. If council members are waiting for a revenue picture for the upcoming budget, the council members will find that city costs will be $100 million more than revenues, he said.
Djou was the only member reached yesterday who is still vehemently opposed to raising the weight tax, especially on Christmas Eve. "The mayor really wants to put a lump of coal in all the taxpayers' stockings this Christmas," he said.
While the city will not collect any taxes on higher property assessments until August, Djou said the city can make it until then. "It's what I've always advocated. You've got to restrain spending. You've got to have those cuts now," he said. "You shouldn't be reaching for that tax lever to hike up taxes every time you have a fiscal hiccup."
Councilman Gary Okino has maintained his support for the vehicle weight tax increase. "It just seems practical that we address it now," he said, pointing out police raises are something people tend to support. "I don't think that we're going to get that much of a negative reaction to raising the vehicle tax now because it's specified for the police raises."
Councilman Nestor Garcia earlier this week issued a memorandum indicating his support and Councilwoman Barbara Marshall also continues to support the weight tax increase. However, Marshall said long-standing family commitments will keep her from attending the meeting.
Councilman Mike Gabbard said he is supporting the increase, but "It's only because it's the only game in town. I don't think it's fair that vehicle owners should be the only ones to pay for the raise, I think it should be spread across the board."
Reach Treena Shapiro at tshapiro@honoluluadvertiser.com or 525-8070.
