City Council wrestles with tax proposals


POSTED: Friday, June 05, 2009

A $6 million appropriation for curbside recycling appears to have been restored by the City Council as it prepares to complete work on the city's operating budget for the next fiscal year.

Still to be worked out is the real property tax rate, although an increase appears likely, according to Council leaders.

Also on the table are increases to the parking rate of 25 cents an hour at the Honolulu Zoo and around Kapiolani Park, which were proposed at $1.50 an hour but could go as low as 75 cents an hour.

Council members have a myriad of scenarios before them as they head into their June meeting on Wednesday, when members say they expect to conclude work on the budget.

One area of agreement appears to be for the final phase of curbside recycling, bringing the service to communities from Central Oahu, through the Leeward Coast to Makaha as scheduled next year.

“;The city—between the mayor's administration and the Council—has put together a very good curbside recycling program,”; said Council Chairman Todd Apo. “;To stall that would not make sense.”;

Apo and Budget Chairman Nestor Garcia laid out four proposed operating budgets yesterday that would find the $6 million in various ways.

Those proposals also lay out a variety of scenarios on how to address the issue of real property taxes, which have become a key target as the Council and Mayor Mufi Hannemann's administration look to close a $50 million gap in the upcoming budget.

Hannemann proposed a 30-cent hike in the property tax rate, setting it at $3.59 per $1,000 of valuation, coupled with a $75 one-time tax credit for homeowners who actually live in their property.

The operating budget that was approved by the Budget Committee on May 18 includes the $3.59 rate and a $175 tax credit intended to offset the bulk of the rate increase.

Based on that version of the budget, going back to the current rate of $3.29 would require $40 million in cuts elsewhere in the budget, Garcia said.

“;I am not going to open up the operating budget again to find $40 million come Wednesday, when we have to pass the budget,”; Garcia said.

Garcia had proposed the $175 tax credit but said the figure would have to be reduced by $25 under his plan in order to realize the $6 million in savings for curbside recycling.

Councilmen Duke Bainum and Charles Djou have proposed keeping the rate at $3.29, with various cuts and cost-saving measures to help balance the budget.

Hannemann said anything short of $3.59 likely would be problematic.

“;We believe the $3.59 rate is a prudent and fiscal way to go,”; Hannemann said. “;The $3.29 does not make any sense at all. The deficit will be humongous as result of $3.29.”;




Taxing situation

        Various property tax and homeowner tax-credit proposals to be considered by the City Council on Wednesday. The current real property tax rate is $3.29 per $1,000 of property value with a $100 one-time homeowner tax credit.

Current proposal
        Rate: $3.59, $175 credit. (Credit would be reduced to $150 to restore $6 million for the final phase of curbside recycling.)


Mufi Hannemann's proposal
        Rate: $3.59, $75 credit


J. Ikaika Anderson's proposal
        Rate: $3.42, no credit


Duke Bainum's proposal
        Rate: $3.29, no credit


Charles Djou's proposal
        Rate: $3.29, $175 credit


Nestor Garcia's proposal
        Rate: $3.59, $175 credit