City budget requests cut in prewar move

By Treena Shapiro
Advertiser Staff Writer

As part of the preparation for war with Iraq, the city administration had cut budget requests by departments, the budget administrator told the a City Council committee yesterday.

But Ivan Lui-Kwan, city director of budget and fiscal services, said he doesn't expect the war to affect the city as much as the state.

He said city departments on the average took a 1 percent budget cut. "We have caused that discipline to be imposed because we're concerned about where the revenues are going to come from," he said.

Lui-Kwan made his remarks before the Budget Committee, which heard briefings on the city administration's proposals for increases in user fees and in the property tax rates to address what he estimated to be a $76 million shortfall for the fiscal year starting July 1.

Lui-Kwan and members of his staff said the war's main effect would be on the city's share of the transient accommodation tax — also known as the hotel room tax — if tourism drops.

City Council Chairman Gary Okino said he expected a war would change the atmosphere, if not the content, of the budget hearings. "My sense is it's going to make us bear down on the budget, try to make us more fiscally prudent," he said. "We don't know what's going to happen, so we'll probably look for cuts, try not to spend money. I hope that's the direction the council takes."

Councilman Charles Djou had raised the issue about the war. "What, if any, action is the administration taking to ready ourselves for the event of war if real property valuations go down significantly and we're actually going to have further reductions in revenues?"

Real property taxes are the city's main source of revenue, and the administration has proposed raising tax rates for all properties except apartments and condominiums.

Some committee members yesterday considered the possibility of closing two satellite city halls, rather than introducing a $2 counter fee. They also contemplated avoiding a $3 increase in monthly adult bus passes, which a city official said will increase revenue by $2.4 million, not $150,000 as the administration previously reported to the council.

Sabina De Giacomo, of the Animal Care Foundation, offered the only public testimony, urging the committee members to reject a proposal to increase spay and neuter fees to cover veterinarian costs.

The bills regarding the real property tax rate and fees will start going through the formal hearing process tomorrow during the City Council meeting.

Reach Treena Shapiro at tshapiro@honoluluadvertiser.com or at 525-8070.

Correction: Sabina De Giacomo is president of Animal CARE Foundation. Her name was misspelled in a previous version of this story.