The Honolulu City Council passed a $4 billion operating budget on Wednesday, eliciting a promise from Mayor Rick Blangiardi that he would line-item veto a part of the budget that guts the city’s economic revitalization office. 

“This is nonsensical,” the mayor said in his office after the vote, “and that’s the part that irritates me.” 

While the mayor can line-item veto the budget, council members can override the veto with at least six out of nine votes. And the council voted with a veto-proof majority.

Council Chair Tommy Waters and Budget Chair Val Okimoto voted in favor of the budget alongside council members Andria Tupola, Esther Kiaʻāina, Scott Nishimoto and Radiant Cordero.

Council members Matt Weyer, Tyler Dos Santos-Tam and Augie Tulba voted no. 

Most years, the proposed city budget is bigger than it was the year before. This year, however, Blangiardi introduced a budget slightly smaller than last year’s, saying it was time to be prudent in the face of a tough economic landscape with stagnating city revenue and increased costs.

To help balance the budget, the mayor cut $50 million from vacant city job positions, a longtime goal of Waters. The council then went further with their cuts, rankling city department heads. 

Within the budget is over $160 million towards culture and recreation, a little less than $500 million for public transit and more than $725 million for debt service, of which about $218 million is for sewer projects. The budget also funds 10 new deputy prosecutor positions in Prosecuting Attorney Steve Alm’s office.

Plans to create a $41 million provisional account controlled by the council for lawsuit settlements, energy costs and disaster response and recovery were scrapped after backlash from the administration. A Blangiardi proposal to double the size of the Homeless Outreach and Navigation for Unsheltered Persons program also did not make it into the budget. The so-called HONU program directs homeless people to services.

Interim Police Chief Rade Vanic on Wednesday told council members he supports $1 million directed toward recruitment incentives for patrol officers to help fill Honolulu’s 460 vacancies of uniformed officers. But he’s worried his department, which has a $400 million allotment in the passed budget, is being made to pay for those incentives with funding its already has.

“It simply shifts resources from one critical need to another,” he said, going back and forth with council members about how feasible it is to transfer money from vacant positions to cover costs.

But the most dramatic budget conversation revolved around the Office of Economic Revitalization, an organization stood up during the pandemic to help deliver a massive infusion of federal funds to the community. 

In the years since the pandemic has waned, some council members have questioned what the office’s role should be, though no serious effort to downsize it was made until this budget cycle.

Okimoto pointed to a January audit of the office as a reason to slash positions. That audit showed the office has only accomplished or made substantial progress towards three out of its eight responsibilities, and Okimoto argued the office has expanded beyond its original purpose. Other departments can achieve the same goals, she said.

“OER has shimmied through its legal mandates to become a secondary social service agency that is not authorized in the charter,” she said. “It is time to prioritize performance over potential.”

The office’s executive director Amy Asselbaye testified in opposition to the council’s cuts to her staff. She said they would eliminate four key initiatives: business support, support for local agriculture, workforce development programs and the city’s capacity for projects like creating a strategic tourism plan and economic forecast plans.

“It is time to prioritize performance over potential.”

Councilwoman Val Okimoto, speaking about cuts to the Office of Economic Revitalization

Roughly 6,000 residents have been helped by the Good Jobs Oʻahu initiative, Asselbaye said, which offers community college job training courses in fields like healthcare, clean energy and creative industries.

“These are pathways to productive employment that would be eliminated,” she said.

Many testifiers spoke on Wednesday in support of preserving the Office of Economic Revitalization, including Sherry Menor, president and CEO of the Hawaiʻi Chamber of Commerce; Kiran Polk, executive director and CEO of the Kapolei Chamber of Commerce; and Hunter Heavilin, advocacy director of the Hawaii Farmers Union.

Direct grants to farmers are the only relief accessible to many of them since many lack federal crop insurance, Heavilin said.

“These are critical funds that we need to see deployed,” he said. “We need the Office of Economic Revitalization to deploy those and all these manifold other magnificent programs they run. One restored planner cannot do it.”

The budget bill eliminates 15 out of 24 positions. 

Weyer, whose district includes the North Shore, said the Office of Economic Revitalization has been crucial in helping his constituents recover from this spring’s Kona low floods. 

“There’s been undeniable recognition from the community that there’s value in the work that’s being done,” he said before voting no on the operating budget.

Blangiardi sent council members a letter on Friday saying he intended to veto this part of the budget if it passed.

“If the Office of Economic Revitalization remains defunded in the budget that is ultimately passed by the City Council,” he said in the letter, “I will have no choice but to veto it.”

On Wednesday, after the council passed the operating budget, Blangiardi told members of the media that he intends to make cuts elsewhere to balance his plan of restoring the Office of Economic Revitalization’s positions, though didn’t commit yet to where those cuts would be. 

“I’d want to look at it to see what we’re dealing with,” he said.