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The Honolulu Advertiser
Posted on: Thursday, November 20, 2003

ISLAND VOICES
Why we need debt, spending ceilings

Councilman Charles K. Djou represents District IV (Waikiki to Hawai'i Kai).
By City Councilman Charles Djou

Often, the best way to avoid a trip to bankruptcy court is serious credit counseling that includes strict limits on both spending and incurring new debt. The city needs credit counseling with a strict spending limit and debt ceiling.

The national and state economies are growing again, and O'ahu is in its hottest real estate market on record. Yet, earlier this year, the city still raised real property taxes by the largest amount in its history. The mayor has also asked the City Council to raise the vehicle tax by 60 percent and warned taxpayers to prepare for yet another property tax increase next year. The city is in these dire straits because we've incurred too much debt.

The city has been on a spending spree, buying a number of "nice" items, but neglecting the basic necessities. It has increased its debt load from 10 percent to 18 percent of the budget over the past 10 years. Now the bill for these "glamour" projects is coming due just as the city faces major challenges to pay for police pay raises, upgrade our wastewater system, maintain our roads and solve our lack of adequate garbage landfill space.

Avoiding a financial breakdown in city government (and preventing our city from getting into a similar mess in the future) means that we need to set limits on government spending and incurring excessive debt.

I introduced Bills 61 and 62 to enact a debt ceiling and spending ceiling for City Hall. Such debt and spending ceilings have been enacted by numerous state and local governments around the country, including the Hawai'i state government, to enforce fiscal discipline.

Such debt and spending ceilings would bring a greater sense of responsibility to City Hall. The Tax Foundation of Hawai'i submitted testimony that such ceilings could even enhance the city's bond ratings. The proposed debt and spending ceiling bills I introduced even have an "escape hatch," allowing the City Council to exceed these ceilings in a crisis.

All elected officials like to talk about fiscal discipline. But true fiscal discipline often requires more than just lip service; it requires real teeth like a clear debt and spending ceiling.