Posted on: Friday, March 11, 2005

EDITORIAL
Borrowing not best way to fund salaries

Mayor Mufi Hannemann's proposal to use a chunk of borrowed sewer improvement money to pay salaries of city workers involved in the project makes sense — from the standpoint of someone trying to be as easy as possible on the strained pocketbooks of Honolulu taxpayers.

But as Hannemann should recognize, this kind of approach is not a sound fiscal policy in the long run. And by proposing this short-term shift of borrowed money into salaries, he opens the door for resistance in the City Council.

In fact, that has already begun.

The amounts involved are not large. The Hannemann administration proposes to use some $6.1 million in borrowed (bond) money for wastewater improvements.

All but a fraction of that would go to pay the salaries of planners and other specialists doing the groundwork for sewer projects.

It's also true that this approach is not new. The Harris administration has used it and the state long used highway construction funds to pay the salaries of engineers and others involved in transportation improvement projects.

Hannemann administration officials say this proposal was made reluctantly, and only because it helps avoid further increases in sewer fees, which already are slated for a substantial boost.

During the mayoral campaign and in recent speeches, Hannemann was blunt about the need to boost sewer fees to complete longstanding and badly needed wastewater improvements.

He has made no secret of the fact that this will produce some short-term pain for ratepayers. At the same time, however, he has said that the higher sewer fees come with the promise that the money generated will stay where it belongs: in the sewer fund. No more "raiding" the fund to meet other needs.

That's a fair bargain and a sensible approach. That same line of reasoning also should lead to a conclusion that it is not good policy to use borrowed money to cover salaries that should come out of the operating budget.