View Point
Smoke, mirrors
of city’s budgetRAISE taxes or cut government spending. The choice is really that simple. Unfortunately, it looks like the wrong choice will be made this year, further burdening our taxpayers with a bigger and more expensive city government. At a time when the private sector is struggling to stay alive in Hawaii, when our families are tightening their belts, it is unconscionable that city government is getting fatter and fatter. Last year, Mayor Jeremy Harris proposed a sweeping city reorganization to reduce the size and expense of government and to make it more "user friendly." Whether or not the city has become more efficient, the plan did not save money.
This year, the mayor proposed an operating budget that was $35 million less than last year's. But hold on a minute! Where did the savings come from? Since last year, the city has realized savings in our debt service of $42 million.
So we should have trimmed the budget by an additional $7 million. Instead, the administration is proposing to spend that money on new programs.
To make matters worse, the new majority on the City Council has added programs and personnel to the tune of $8.5 million. This extra money did not appear magically. In fact, it's going to disappear from your pockets at the rate of $27 million owing to a proposed increase in property taxes ranging from 3-16 percent.
Earlier this year, then-Council Chairman Mufi Hannemann and I asked the mayor to impose a hiring freeze. We told him that we were looking at eliminating some of the 160 vacant positions funded in his proposed budget with $6 million.
Rather than eliminating these vacant funded positions, the leaders of the newly reorganized City Council, along with Mayor Harris, are funding these positions and adding 24 new employees to the payroll. What does this mean in terms of increased taxes?
Because of staggered hiring, the first year's salary and benefits for these new employees will add up to "only" about $600,000. But for every year thereafter, these new employees will cost $1 million.
It gets worse. After the City Council rejected the mayor's proposal to raise $21 million in proposed new garbage pick-up fees and increased golf fees, another $21 million in savings or increased revenues was magically found.
How can you have confidence in an administration that tells you the budget is "cut to the bone" and tries to levy $21 million in increased fees on you, only to "find" $21 million elsewhere overnight?
How can you trust Council members who, rather than cut government spending, increase it by millions of dollars in order to grab $20 million in additional "pork" for their districts at the expense of all of us? My stated goal at the beginning of the budget season was to pare down the capital budget from the mayor's proposed $252 million to about $200 million. Regretably, in exchange for votes to support new Council leadership, the capital budget has swelled to $267 million.
Remember that this is borrowed money -- money on which we must pay interest over the life of the bonds. Based on current terms, the city will pay a whopping $121 million more over the life of the bonds in order to satiate certain Council members' appetites for pork. That's $121 million in interest payments over what we would have paid if we had trimmed the capital budget to $200 million.
THE smoke and mirrors used to balance this budget amount to little more than manipulation of the budgetary pro-cess in order to gain political advantage.
Rather than "finding" an additional $30 million and then spending it, we should use that money to reduce property taxes. Instead, property taxes are being raised, the money is being spent and, to compound matters, the Council is set to approve a "tax holiday" for businesses that will cost the city between $10 million and $12 million over seven years, according to the Office of Council Services.
Mufi Hannemann and Donna Kim can look you in the eye and tell you they have fought hard for a budget that would cut government spending, reduce the fat and lessen the tax burden on citizens.
That's something that six other Council members honestly can't say.
John Henry Felix is a member of the Honolulu City Council.