Tax hike eyed
as way to pay copsAn arbitrator decides that
police statewide deserve a 16%
raise over the next four years
Mayor Jeremy Harris has frozen city hiring and is considering a gasoline tax hike and cuts in services to pay for 16 percent pay raises awarded to police officers over the next four years.
"I think everybody is in agreement that police officers should be paid more," Harris said. "The only question is, how does a community afford to pay these pay hikes?"
An arbitrator decided that police officers from all four counties should receive a 16 percent pay raise over the course of a four-year contract, it was announced yesterday.
Should the state's four county councils agree to fund the collective bargaining agreement, police officers will receive across-the-board 4 percent increases in each year of the agreement, effective retroactively to July 1.
Harris said the immediate concern is how to pay for $5.7 million for the current fiscal year. He said the pending four-year contract will cost the city $67 million.
The mayor said he has instituted an immediate hiring freeze, which comes on top hundreds of vacancies not funded in the current budget.
"It's going to put an enormous strain on city operations that are already operating at enormous vacancy levels," the mayor said.
Harris said he is also looking at raising the city fuel tax by 2 cents a gallon each year of the contract. The city's fuel tax is now 16.5 cents per gallon.
"The gasoline tax obviously deals with roadways and a huge portion of our police budget deals with police officers out on the roads, on the highways giving tickets, doing traffic enforcement," Harris said.
He also said that the gasoline tax is one of the few avenues the city has to generate revenues.
"It's about the only thing that we have the ability to affect right now in the middle of a budget year," he said.
Raising the vehicle weight tax is another option.
But even if such a proposal goes into effect in January, the increase would only raise an additional $2.9 million.
"We'd be $2.8 million short. We'd have to cut somewhere," he said.
News of the arbitrator's decision received a mixed reaction at the Honolulu Police Department.
"I'm happy that the arbitrator saw that our officers need a pay raise. Our officers certainly deserve a pay raise," said Chief Lee Donohue.
However, because of changes in the state's health insurance laws for public employees, officers will see little if any increase in their take-home pay, said Kimo Smith, Oahu chapter chairman of the State of Hawaii Organization of Police Officers. SHOPO is the union that represents Hawaii police officers.
"We had no control over that," Smith said.
Some members have complained that their take-home pay will be less under the new contract, but Smith said that is not true.
He said, "They would be breaking even or slightly ahead."
State lawmakers created the Hawaii Employer-Union Health Benefits Trust Fund two years ago to replace various union-sponsored health plans. The employees pay a portion of the premiums based on the percentage negotiated by their unions.
Under the new contract, SHOPO members will continue to pay 40 percent of their health care premiums while the state pays the rest. Some officers have complained that the union should have tried to negotiate a lower percentage.
In July, the health insurance premiums for state public employees increased to 16.1 percent from 12.5 percent. The rates are expected to climb further in 2004.
At Honolulu Hale, Harris said he couldn't raise property taxes for the current fiscal year because the rates have already been set, but he hasn't ruled out a property tax increase for next fiscal year.
"That's certainly a possibility," he said.
The Council approved Harris' proposal during a contentious budget season earlier this year to raise real property taxes 2.7 percent.
Harris said that the city budget has had to absorb $176 million in pay raises.
"The collective bargaining process is such that we really don't have control over pay raises," he said.
Whether it is the gasoline tax, the property tax or some other tax, Harris is advocating a dedicated source of funding to pay for the salary increases.
"You know how tight the budget was, all we went through," he said. "Obviously, the $67 million is going to have to come from somewhere."
Members of the City Council also expressed support for the police pay raise but they, too, wonder where the money will come from.
"The police are underpaid and I think they are also understaffed," Budget Chairwoman Ann Kobayashi said. "Having this better salary I hope might attract more people to join the police department."
But Kobayashi and other Council members noted that the city is looking at looming fiscal problems.
Council Chairman Gary Okino said, "That is a lot of money (for pay raises), especially with our fiscal situation now.
"We're already facing a huge budget shortfall next year. I'm sure all of the council members are supportive but how are we going to fund that?"
In addition to the 16 percent pay raise, officers will get a boost to the differential pay they receive for having to abide by a Standard of Conduct. On July 1, 2005, differential pay for officers with the rank of metropolitan police officer I and below will go up from $75 a month to 80 cents an hour, or $128 for a 160-hour month. Differential pay for metropolitan police officer IIs, sergeants and higher will go up from $85 per month to $1 per hour, or $160 a month.
SHOPO members with the rank of metropolitan police officer I, with between four and six years of service, make up the largest group in the union. Those who will not have completed seven years of service to move up a step on the pay scale in the first year of the contract, and who chose full family health coverage, will receive a $35 monthly wage supplement until June 30, 2004.
SHOPO's old contract expired June 30. After a year of negotiations, the two sides agreed to binding arbitration July 1.
Arbitrator Catherine Harris released her final decision and award Friday.
