Honolulu Mayor Kirk Caldwell is proposing to spend nearly $25 million in the upcoming year on planning and developing neighborhoods around the Honolulu rail route.

The spending, announced at a press conference Friday in which Caldwell unveiled his $2.15 billion proposed budget, reflects the city’s focus on transforming neighborhoods along the 21-mile rail line that will stretch from East Kapolei to Ala Moana Center.

The transit-oriented development projects planned for neighborhoods around 19 stations will likely entail hundreds of millions of dollars in the coming decades.

“To really make sure rail succeeds, we need the interface between the rail system and the community that is going to use it,” said Caldwell. “And the game changer . . . is about what happens around these transit stations in terms of creating housing for the middle class and urban core.”

The proposed budget, which now goes to the Honolulu City Council for debate and approval and includes $640 million in spending, would take effect July 1.

Capital expenditures reflect many of the themes the mayor touched on in his State of the City address earlier this week, which focused on improving the city’s infrastructure and services.

That speech was delivered at Ala Moana Beach Park to emphasize Caldwell’s focus on cleaning up parks, for which he has allocated $100 million in this year’s budget.

Friday’s press conference on the budget was staged in a warehouse at the Kalihi-Palama Bus Facility on Middle Street to emphasize the mayor’s plans to increase public bus service, for which he has allocated $1.5 million.

As Caldwell unveiled his budget, replete with multiple charts, workers were busy fixing a bus behind him.

“I’m very proud of this facility,” he said, as city workers and a couple council members stood by his side. “Anyone who has come here before understands what a great operation we have for the bus. You look at this floor, I could drop by musubi down here, pick it up and nothing will we be stuck on it. I could eat it.”

Caldwell said the facility reflects his priority of maintaining the “back rooms” of bus and garbage facilities that are critical to keeping the city running.

Caldwell also wants $140 million for his road repaving program — the mayor has promised to repave every substandard road in the next four years. He has also carved out $22 million to help move homeless people into housing.

Closing Budget Hole

In the months leading up to the proposed budget, the Caldwell administration was wrestling with how to close a $156 million budget shortfall.

In this budget, the mayor has plugged part of the hole through eliminating more than 600 vacant government positions, as well as increasing fees and taxes.

Caldwell also wants to raise property taxes for non-residents who own properties on Oahu valued at $1 million or more.

“We know there are folks who live on the mainland U.S. or other parts of the country or in Asia, who love Hawaii, like all of us, and would like to have a home on the water and a really great condo somewhere looking over the ocean, who buys an investment, or a second or third or fourth or even fifth home,” said Caldwell. “So we’ve created a second (tax) class.”

The tax rate for such homeowners will increase by 57 percent and is expected to bring in $26.4 million for the city.

The proposed budget, for the first time in more than five years, also increases taxes for hotels and resorts. The new tax rate jumps by $1 to $13.40 per $1,000 of the property value. The increase is expected to bring in $8.2 million.

Caldwell also wants to increase fees for building plan reviews, bringing in $500,000.

But his most controversial proposals are his plan to charge residents $10 a month for trash pick-up service and his plan to place advertisements on the sides of buses.

Earlier this week, the City Council’s Budget Committee rejected both proposals, which were expected to bring in $11.5 million this coming year.

Council Chair Ernie Martin hoped that squashing both proposals this week would force the mayor to come up with different sources of revenue to plug the budget hole.

But Caldwell put both measures in his budget anyway, noting that technically the City Council could bring them back to life. Now, if the City Council rejects the proposals, or any other revenue increases in the budget, it will be up to council members to plug the holes.

“If they don’t like them, they will need to come up with ways to balance the budget through other means or through cutting services,” said Caldwell.

About the Author