Mayor's budget draft makes the best of bad circumstances


POSTED: Wednesday, March 04, 2009

The economic downturn has decreased city revenues from taxes and fees, so it comes as no surprise that Mayor Mufi Hannemann is proposing increased rates to balance the city's budget in the upcoming fiscal year. His suggested increases appear to be distributed fairly and should require little if any change by the City Council before being put to use.

The sharp reduction in tourism has been reflected in a decline in hotel room and fuel tax revenues, while hotels, restaurants and other businesses that cater to travelers struggle to survive the economic crisis. Hannemann has recognized their plight by keeping commercial and industrial property tax rates the same. Taxes for homeowners, however, will go up, returning to 2007 rates. The monthly property tax hikes will average about $10 for single-family homes and $8 for condominiums.

With the reduction of home values, the net revenue to the city through property taxes will be questionable. Property tax rates will remain far below rates on the mainland, where property taxes typically pay for schools.

The mayor calls for an operating budget increase of about 1 percent, due largely to union contracts with police, firefighters and bus employees and increases in the debt service and city employees' health and retirement system contributions. Hannemann and his cabinet members are taking exemplary 5 percent salary cuts and city managers are accepting pay freezes.

Hannemann's proposed fee increases cross into numerous areas, such as fees for license-plate renewal, those for fire alarm permits and a doubling of fees for use of police officers for special duty.

Most noticeable to residents would be increased bus fares from $2 to $2.25 a day and from $40 to $50 for monthly passes. Those rates — especially the monthly rate — still would be a good deal compared to bus fares in mainland cities.

Green fees at city golf courses would rise from $16 to $19 a round for adults and from $9 to $12 for children, and monthly rates from $32 to $40 for seniors, while cart rentals would go from $16 to $19. Essentially that would mean an adult golfer sharing a cart would pay $27.50 a round, still far below green fees at privately owned courses that are open to the public.

The steepest rate increase would be those residents who have benefited from ultra-cheap parking next to the Honolulu Zoo. Rates would increase from 25 cents to $1.50 an hour, finally reflecting the reality of typical parking rates throughout Waikiki.

Hannemann also proposes increases from $4 to $6 for resident adults, $8 to $12 for nonresidents and $1 to $3 for children for admittance to the zoo itself. To hear President Obama tell it from his most recent visit to the zoo with his children, that still would be a great deal.