City Council member Donovan Dela Cruz, left, listened to Charles Djou, far right, during public hearings yesterday in the Council Chambers. In the center is Mike Gabbard.

Tax and fee hikes survive
City Council hearing

A $1.2 billion budget favored by the mayor
moves to the budget panel for more review

The City Council early this morning moved to its Budget Committee a proposed $1.2 billion city operating budget for the next fiscal year, but voiced frustration at Mayor Jeremy Harris using yet-to-be approved fees and taxes to balance what one member called a "stealth" or "phantom" budget.

"This money in the budget doesn't exist," Budget Chairwoman Ann Kobayashi said. "They are balancing with revenue that's not there."

The administration is proposing $23 million in property tax rate increases and $24 million in fee increases to help balance the city's nearly $1.2 billion operating budget.

Following a lengthy public hearing, the Council forwarded the measure that contains the administration's property tax increase proposal. It now goes to the Budget Committee where, Kobayashi vowed, "We will amend it."

The Council also passed out several fee bills relating to fees which many on the council oppose, but which the administration has used to balance the budget.

"They hold us hostage with these bills," Kobayashi said, threatening to hold the budget in her committee. Doing so would mean the mayor's budget would then go into effect.

But other members of the Council spoke against that action, because several controversial items -- such as a new curbside recycling program and accompanying trash pick up fee -- also could go into effect.

"We need to address the budget," Council Chairman Gary Okino said. "Just letting it sit, I think that has problems, too."

The budget, passed out by an 8-1 vote, also includes nearly $2 million in cuts the Council is proposing to avoid having to raise taxes or fees.

Councilman Charles Djou cast the lone dissenting vote following the hearing on various bills pertaining to the city's legislative, operating and capital improvement budgets. The hearing ended about 1 a.m., nine hours after it began.

During the hearing, council members expressed disdain for many of the fee increases proposed by Harris by essentially killing his proposed fee for some transactions at satellite city halls.

"This fee defeats the purpose of having satellite city halls," said Councilman Donovan Dela Cruz.

The $2 fee would be for transactions that can be paid either by mail or through the Internet, including vehicle registration renewals, water bill payments, property tax bills and licenses for mopeds, bicycles and dogs.

City Customer Services Director Carol Costa, who oversees the satellite city hall program, said she was disappointed in the Council's action, noting that "the counter service convenience fee was recommended ... to try and deal with the huge increase in workload" and to shorten long lines at the satellite city halls.

But criticism was vehement.

"I believe this bill is dumb. The city administration, which has prided itself on customer service, now wants to charge us if we pay bills in person," said Lynne Matusow, of the Downtown Neighborhood Board.

However, Councilwoman Barbara Marshall warned, "Be aware that possible trade-offs on this bill could be the closing of some ... satellite city halls. By giving back the free service, we may be taking away completely from some."

Kobayashi said the Council made nearly $2 million in cuts to the mayor's budget, which should help offset $685,000 in revenues that the $2 fee was projected to bring in.

Dozens of people also testified to save items that the Council is proposing to cut from the operating budget.

Many business people and Waikiki executives testified against eliminating "Sunset on the Beach," the city-sponsored weekend events of movies, entertainment and food.

And, hula teacher Kapiolani Ha'o chanted in Hawaiian entering the Council chamber before asking members not to do away with the Kuhio Beach Torch Lighting and Hula performances in Waikiki. "We have been able to share our culture with the visitors that come to our islands."

Kobayashi said the goal is to find a home for the torch lighting and hula program, which has been "bounced around" from different departments, and funding will be restored once an appropriate department budget has been found.

Several Council members explained the budget quandary.

"If we keep everything in the budget, we're going to have a tax increase," Marshall said of the mayor's proposed budget. She repeatedly asked those who testified in favor of saving city programs, "Are you willing to pay higher taxes for that?"

The tax proposal calls for owners of single-family homes and apartment owners to pay the same rate. That would mean the current $3.65 per $1,000 in assessed valuation for single-family homes would rise to $3.75, but the rate for apartment owners would go down 4.5 percent to $3.75 from $3.93. For nonresidential categories, the mayor is also proposing a single rate of $10.63 per $1,000 in assessed value.

City & County of Honolulu

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