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Mayor's plan uncorks flood of price hikes


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POSTED: Tuesday, March 03, 2009

Honolulu residents already dealing with tough financial times might be forced to pay more in property taxes and other fees as the city works to overcome a $50 million budget shortfall in the coming year.


;[Preview]    Mayor Proposes Property Tax, Fee Hikes
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The increases will solve a 50 million dollar budget shortfall caused by a drop in property values on Oahu.

[Watch]

 

Mayor Mufi Hannemann unveiled a $1.8 billion budget that includes only a slight increase in spending but increases in property taxes and various city fees. It covers the 2010 fiscal year.

The increases are needed to avoid steep cuts in government services, such as public safety, sanitation and transportation, the mayor said.

“;I think the challenge that we face is you never hear anyone say, 'I want less service, I want less police officers, I want less clean parks, I want less police protection,'”; Hannemann said at a news conference at City Hall. “;They always want more.”;

City Council Chairman Todd Apo said the mayor's budget would be thoroughly vetted.

“;It's not life-ending devastation, but it's tough and we're going to have to work through it,”; Apo said. “;Everyone's going to have to accept this combination of an adjustment in the services they may have otherwise expected and had in the past, with the realization that we're all going to have to pay a little bit more.

“;We all want to minimize that impact, but we need to operate the city government.”;

Hannemann said he saw raising real property tax rates as a “;last resort.”;

He noted that his administration already has instituted cost-saving measures such as 2 percent to 3 percent departmental budget restrictions, a hiring freeze, travel restrictions and deferments on various equipment purchases.

The city also has decided to cut 806 vacant jobs, saving $36.3 million for the 2010 fiscal year.

“;I think we've cut as much as we can cut,”; Hannemann said.

If approved by the Council, residential real property tax rates would increase 30 cents to $3.59 per $1,000 of property value.

Coupled with a $75 tax credit, the tax on a home at the median price of $624,000 for a homeowner under the age of 65 would increase by about $10.34 a month, or $124.08 a year. For a condominium at the median price of $325,000, an owner under age 65 would pay $8.21 more per month, or $98.52 a year.

Fee increases would cover TheBus, Honolulu Zoo admissions and greens fees on public golf courses.

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The adult cash fare would increase a quarter, to $2.25, while the monthly pass would jump $10, to $50. A four-day visitor pass would increase $5, to $25.

Zoo fares would increase for residents, visitors and children, while parking at the Waikiki attraction would increase to $1.50 an hour, up from 25 cents an hour. Hannemann noted that the zoo has improved its exhibits in recent years and even attracted then-President-elect Barack Obama when he vacationed in Hawaii in December.

Public greens fees and golf cart rentals also would increase across the board.

“;I think what we're presenting today is very fair,”; Hannemann said.

He noted that the budget is premised on current funding sources, such as the city's share of the transient accommodations tax and the 0.5 percent general excise tax surcharge, remaining intact.

State lawmakers, who are looking to close a $1 billion budget deficit of their own, have floated the idea of using some of those revenue sources.

“;We're there every day just trying to tell them, 'Please don't touch the TAT, and please don't touch the half-percent coming to the county,'”; Hannemann said.

“;I'm hoping that it doesn't happen, but that's a big question.”;