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The Honolulu Advertiser
Posted on: Wednesday, March 3, 2010

The only industry that keeps on growing

Mayor Mufi Hannemann yesterday presented a $1.83 billion operating budget that he described as "lean" and which balances the books without raising taxes or fees on businesses and most homeowners.

The mayor noted that his budget is a scant 1.2 percent higher than last year's.

It is also 36 percent higher than the budget he drafted in his first year as mayor in 2005. The city will spend about $480 million more than it did to keep O'ahu running five years ago, and that doesn't include the proposed rail project, sewer upgrades and street repairs that are part of a separate $2.1 billion capital improvement budget.

A big piece of those increased costs can be attributed to generous pay raises negotiated by city workers over the past several years. Some of those gains are being given up this year as workers take furloughs and pay cuts.

So, while it's great that most tax rates aren't rising, why aren't they falling? Even in the worst economic downturn in modern history the city budget is still expanding.

Assuming for a moment that a smaller city budget would subvert the laws of physics, Hannemann gets points for leaving all the tax rates untouched except for those paid by nonoccupant owners of homes and condominiums. And even that is a tiny increase.

The city also gets credit for negotiating 24 furlough days for 5,200 workers, the maximum accepted by leaders of Hawai'i Government Employees Association and United Public Workers. One UPW unit has struck a deal for only 21 days.

Hannemann should press ahead with discussions among union members to realize further efficiencies. For example, the merger of the fire and emergency medical services agencies, an idea the mayor raised a year ago, makes sense and should be pursued.

State lawmakers still could decide to scoop the $41 million in revenue from the hotel room tax Honolulu now gets, and that will put pressure back on Hannemann and the City Council. Legislators are leaning against doing that now, but the next state tax revenue projection could lead legislators to raid more funds.

The Council, which yesterday took custody of the proposed budget, still must prepare to make cuts should unforeseen shortfalls arise.

And no matter what, tapping the taxpayers for more money should be off the table.