The Honolulu City Council voted overwhelmingly in favor of a mayoral proposal Wednesday to place advertisements on the outside of city buses. The potential ad revenue, which could total million of dollars, is slated for bus service improvements.

But Bill 69, which still needs further approval, could still be delayed for at least a year.

City Council Budget Chair Ann Kobayashi indicated during the hearing of the full council that she wants to keep the measure in her committee until next year.

“I don’t anticipate seeing this bill until probably the next budget cycle,” Kobayashi told council members prior to the 8-1 vote.

She said Council Chair Ernie Martin said he prefers to make cuts elsewhere in the fiscal 2015 budget to fund increased bus service.

Kobayashi and Martin didn’t specify what might be cut to help stabilize bus service.

But none of that stopped the council’s overwhelming vote for the plan.

Council members Ikaika Anderson and Joey Manahan voted in favor with reservations, while Martin cast the sole dissenting vote, warning that the ads could detract from the island’s beauty and make Honolulu like Los Angeles and New York.

“We are going down a slippery slope and that road is very treacherous if you choose to go in that direction,” Martin said.

“If you move in this direction, you remove a lot of that aura that makes Honolulu the special place that it is.”

The City Council is in the midst of finalizing the fiscal 2015 budget, which goes into effect in June.

In February, Mayor Kirk Caldwell inserted $1.5 million into the budget from anticipated bus advertising revenue, before turning it over to the City Council for review and passage, even though the City Council had previously shot down the proposal.

The move by the mayor angered some City Council members. If they rejected the bus ad proposal, they would have to come up with an alternative to closing a $1.5 million budget hole.

Many City Council members have since become amenable to the measure, which was resurrected for debate last month, and they have stressed the need to come up with funding to restore past bus cuts.

Still, the proposal has been divisive for the public with several dozen people turning out to testify for and against the measure Wednesday for over an hour.

The Outdoor Circle, an environmental group that led the 1920s campaign that banned billboards in Hawaii, has been at the forefront of the movement against the measure. They argue that the ads, which they call “rolling billboards,” detract from Hawaii’s natural beauty and that they will open the floodgates to even more outdoor advertising.

First Amendment protections could also make it hard for the city to restrict offensive ads on buses — such as political ads about abortion and gay marriage. Attempts at restricting certain ads could lead to lawsuits, as has happened in cities like Portland, New York and San Francisco.

Critics of the proposal also pointed out Wednesday that the city will have more money this year from the Transient Accommodations Tax, which could be used to support bus services.

The city brings in about $73 million from the tax, but that fund has been raided in recent years by the state. The Hawaii Legislature recently passed a measure that for the next two years will give the city $4.4 million more annually from the TAT revenues than expected. Oahu will now receive $45.4 million, according to Jay Parasco, a spokesman for the mayor. 1

However, the Caldwell administration says a stable and added source of revenue is still needed to stave off cuts to bus service in the long run and to restore cuts made by former Mayor Peter Carlisle. And they say the debate is ultimately about “transportation equity” and making sure low-income residents have a reliable source of public transportation.

Mike Formby, director of the city’s Department of Transportation Services, rattled off a litany of bus statistics to the council to show how much low-income and elderly residents rely on city bus service. He told council members that 37 percent of riders have no vehicle in their household, 47 percent don’t have a driver’s license, 27 percent say they couldn’t get around without the bus and about half of riders have household incomes below $40,000.

“Transportation equity is not someone who comes up here and says I ride the bus too,” he said. “Transportation equity is all those people who are nameless and faceless before you today that do not want to come and admit to you that this is (crucial to) their livelihood.”

The latest estimate from the city is that bus advertising could gross about $7.5 million in ad revenue annually for the city. But an outside company, hired by the city to sell and manage the ads, would take a substantial cut of however much the plan grosses.

Formby said he hopes that the city will reap as much as 75 percent of the total advertising revenue, but that would be high compared to comparable cities.

He also criticized Martin’s efforts to make cuts elsewhere to avoid the need to place ads on buses, likening it to “robbing Peter to pay Paul.”

Councilman Breene Harimoto agreed.

“Looking for cuts sounds great, but it is not sustainable,” he said. “We have huge unfunded liabilities. I don’t want to be kicking the can anymore.”

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