Harris calls for tax hike to meet workforce costs
By Johnny Brannon
Advertiser Staff Writer
A modest increase in property taxes is needed largely because spending on the city workforce has grown in areas that city leaders have no control over, Mayor Jeremy Harris said.
City spending on the employee retirement system, worker health fund and workers' compensation will increase by a total of nearly $23 million during the fiscal year that begins in July, Harris said.
The increases are due to state mandates that his administration cannot change, and the tax hike will barely cover them, he said.
The city's health fund bills have nearly doubled since 1994, from $36 million to $69.7 million, according to Harris.
"Even with fewer employees, we're having increased health fund costs," he said.
And the city's payment to the state retirement system will increase from $17.7 million to $32.6 million during coming year.
In all, the city's operating budget would increase from $1.116 billion to $1.178 billion under Harris' spending plan. The mayor said that is $106 million less than city departments had requested.
Harris hopes to save $32.1 million by eliminating 955 jobs that are vacant. He said no workers would be laid off.
The city's annual construction budget would be $288.5 million, down sharply from $455.6 million in the current year.
"The long and the short of it is: Our problem hasn't been spending," Harris said. "The problem has been that we've had a shortage in revenues because our main revenue is property taxes, and we've had about a $19 to $20 billion drop in property values on the island."
The tax plan may be a hard sell with the City Council, which must approve any increase. Several members have voiced strong objects.
"Raising taxes in our current economic climate is a terrible idea," said Councilman Charles Djou.
"Is there room for budget cuts?"
Djou suggested that the city could save money by having workers from the private sector, rather than city employees, maintain all of the city's parks
Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.
