- Special Projects
Honolulu residents will have to pay more to drive and park as the result of City Council action Wednesday to balance the 2018 fiscal year budget.
Over the last four months, the council considered a slew of proposals from Mayor Kirk Caldwell to increase taxes and fees on Honolulu residents and businesses. On Wednesday, the council voted to increase parking meter fees and the vehicle weight tax.
“I didn’t think there was any way we could get away from revenue enhancements,” said Councilman Joey Manahan, the newly appointed Budget Committee chair.
The tax and fee increases will generate about $16.9 million annually for the city’s highway fund, according to Manahan. The fund pays for road improvements and current forms of public transportation — TheBus and TheHandi-Van– but can also cover the operating and maintenance costs of rail.
The money can’t fund rail construction, but enhancing the highway fund will free up general funds for other city expenses, like giving raises to public employees, Manahan said.
Salary and benefit increases are expected because most of the city’s employee union contracts are up for negotiation this year.
A group of council members who have consistently voted against tax and fee increases held their ground Wednesday. They include Carol Fukunaga, Ernie Martin, Trevor Ozawa and Ann Kobayashi.
Even a 10-minute coffee run will cost drivers 50 cents if they choose to park at one of the city’s downtown or Waikiki metered stalls thanks to Bill 12, which passed Wednesday. It doubles parking meter fees from $1.50 per hour to $3.
Bill 10 will raise the vehicle weight tax from 5 to 6 cents per pound by 2018, then to 7 cents by 2019. The rate hasn’t gone up since 2011.
A much-fretted-about general increase in property taxes won’t happen next fiscal year, something Budget Committee members consider a success.
“One of the major highlights is that there is no increases to residential property tax,” Councilman Brandon Elefante said. “I commend the budget chair for turning over every rock and looking at every option to balance the budget.”
Property taxes are going up, but only for non-owner-occupied homes worth $1 million or more, referred to as Residential A properties. Using a two-tiered system, the council lowered the tax rate for these high-end properties from $6 to $4.50 per $1,000 of assessed value for the first $1 million of valuation. Above $1 million, the rate would increase to $9 per $1,000 of valuation.
Owners of agricultural land, regular residential properties, hotels and all other properties classes are off the hook for now.
The Budget Committee scrapped a proposed 3.9 percent property tax hike for hotels and resorts, to the relief of hotel industry lobbyists. The council received testimony against the bill from almost 30 hotel and tourism representatives.
Caldwell’s original proposal, Resolution 17-70, would have increased property tax rates for hotels and resorts from $12.90 per $1,000 of assessed value to $13.40, generating $6.53 million annually for general city operations.
When the council rejected the hotel tax hike, Councilman Brandon Elefante also tweaked the bill to increase TheBus and TheHandi-Van fares. His amendments eliminated a proposed Handi-Van fare increase from $2 to $2.50 per trip, something council members Kymberly Pine and Ernie Martin had been vying for in council meetings.
The Budget Committee also nixed Caldwell’s proposal to charge Oahu residents for trash collection. The city’s semiweekly trash collection service is currently free, and Bill 29 would have established a $10 monthly fee for the service.
Caldwell detractors didn’t have much say in this year’s budget. A 2017 power shift replaced Martin with Councilman Ron Menor as council chair and Kobayashi with Manahan as Budget Committee chair.
Martin and Ozawa proposed a slew of cuts to the mayor’s operating budgets, but few were considered by the new Budget Committee.
Despite the change, Manahan said council members got what they wanted out of the budget.
“We were able to accommodate most if not all of the members’ requests,” he said.
The council accepted just $1.5 million in cuts from Caldwell’s original operating budget, resulting in a final executive operating budget of $2.45 billion.
The mayor got all the money he requested for two new departments voters created with the 2016 charter amendments. That includes $730,000 for the new Department of Land Management and $717,388 for the Office of Climate Change, Sustainability and Resiliency. Funds for the office were removed in the budgeting process, but eventually restored.
Council members gave the new climate change office a few homework assignments. Anderson earmarked $150,000 of the office’s budget for a visitor census study in Waimanalo and Kailua. Fukunaga set aside $100,000 of the office’s budget to study the impacts of rising sea levels along Oahu coastlines.
The council fattened up the mayor’s proposed capital budget from $956 million to more than $1.05 billion.
The capital budget for the upcoming fiscal year, which begins July 1, includes $50 million to buy land and build affordable housing in neighborhoods around rail.
In a last-minute change that frustrated many council members, money from the Clean Water and Natural Land Fund that would have gone toward acquiring land for preservation at locations including Paiko Ridge in Kouliouou, Waimea Forest on the North Shore, and Kalihi Valley, was put on hold.
The fund must first go through the city’s Department of Budget and Fiscal Services and get approved by the Clean Water and Natural Lands Commission.
Parks and recreation facility upgrades amounted to $101 million.
A wider sidewalk, greener grass and other upgrades to Ala Moana Regional will cost taxpayers $20 million. That’s the largest single annual sum of money given to the downtown park in the last 10 years. The budget also includes $12 million to redevelop the Blaisdell Center.
Plans for Thomas Square renovation have stirred controversy among the Makiki community and council members. Caldwell wanted $4.7 million to add a band stand, a statue and make other changes to the downtown park. The budget committee removed $1.85 million from that budget, but Manahan restored the funds.