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The Honolulu Advertiser
Posted on: Sunday, May 3, 2009

Council must dig deep to reduce spending

Even before budget talks wrap up at the state Capitol — where tax increases of some kind seem all but assured — O'ahu residents must confront a harsh reality: The city budget, due to be finalized in early June, is certain to dish out more pain.

The recession has depressed property values, cutting deeply into the city's primary revenue stream. Mayor Mufi Hannemann and his City Council colleagues are right about the need to look down the road two years, when the revenue picture is going to look even bleaker, to devise a realistic spending plan. And the prospects look dire enough that raising a range of taxes and fees seems a very likely outcome.

Nonetheless, the city should consider further spending cuts, as various council members are now proposing. Even if they aren't enough to forestall a boost in property taxes, O'ahu residents need to feel confident that elected leaders have exhausted all efforts at frugality before adding another layer of taxes and fees when households are already struggling to pay bills.

Councilman Duke Bainum, for example, seeks to shave nearly $42 million off the operating budget. Cuts include tightening allotments covering energy expenses and legal judgments against the city. Perhaps some trims will prove impractical, but they deserve full discussion.

Budget Chairman Nestor Garcia is looking at even more unpleasant options, such as delaying the rollout of the final phase of the recycling program, even though his Waipahu voters are among those affected.

Garcia is rightly worried about labor costs, too. City union employees, like their counterparts in state government, should expect to share in the sacrifice that comes when economic fortunes are poor.

That's because there's one thing in this murky landscape that's clear: The city is going to have to dig down to find more savings in its operating budget.

The City Council and mayor's office worry that the next projections from the state Council on Revenues in a few weeks will force another round of Capitol belt-tightening, which has already threatened to divert the counties' share of hotel-room-tax revenues into the state's coffers.

It's time in the coming months for everyone with a hand in crafting the city budget to go through the spending plan with an eye toward cushioning the impact on taxpayers.

They are already being tapped more, at a time when they can least afford it.