City weighs options
on raises for policeA vehicle tax increase is proposed
amid growing opposition
Hike the vehicle weight tax, cut hundreds of city jobs or use the money from the sale of the city's Block J lot in downtown Honolulu.
Those are the options considered yesterday by the City Council, which is becoming uneasy with raising taxes to fund police pay raises.
But the city administration says that the $10.5 million being offered for Block J is already spoken for, and if the Council decides not to raise the vehicle tax, the administration will have no choice but to cut services, including the layoff of as many as 350 employees.
The Council's Budget Committee moved out Mayor Jeremy Harris' proposal to hike the passenger vehicle weight tax to 2 cents a pound, a 0.75 cent increase. The proposal also calls for the commercial vehicle weight tax to climb to 2.5 cents a pound from 2 cents.
Councilman Charles Djou cast the only vote against the hike, but he was not the only one concerned about the bill, which is poised for final approval Dec. 3.
"I know all of us do not like this bill," said Budget Chairwoman Ann Kobayashi.
Growing opposition by the commercial transportation industry was also heard yesterday. "A sudden impact like this can put businesses under and cost jobs," said bus operator Ken LeVasseur.
Police won an arbitrated award that will cost $67 million over the four-year contract. The tax increase is expected to generate $6.5 million in revenue for the current fiscal year and $13 million for next fiscal year. The city needs to pay for $5.7 million in raises this year and nearly $13 million next year.
Two weeks ago the Council unanimously passed a resolution supporting the raises.
Councilman Romy Cachola says the announcement that a buyer has been found for Block J, a remnant of the city's old downtown redevelopment plan, is good news, and money from the sale can be used to pay for the raises in the current fiscal year. That, he said, could give the Council more time to consider a long-term funding source for the raises during spring's budget discussions.
"It's manna from heaven," said Cachola, who supports the Council deferring action on the tax hike.
The Pflueger Group LLC has offered to purchase the 103,000-square-foot parking lot bordered by Beretania Street, Pali Highway and Queen Emma and Kukui streets for $10.5 million.
Until three years ago, Block J was slated to be the site of an affordable rental project, but those plans fizzled with the sluggish economy and it was put up for sale earlier this year.
Talk of deferring the vehicle weight tax bill by Cachola and others led to a heated exchange between Kobayashi and Budget Director Ivan Lui-Kwan.
"All you're going to be doing is deferring the pain," Lui-Kwan said.
Kobayashi said that it was the administration that deferred the pain by not budgeting for the raises as other counties did.
Lui-Kwan said that if the Council does not approve the vehicle weight tax by Jan. 1 -- the Dec. 3 meeting is the final Council meeting of the year -- that funding source will be lost for the current fiscal year.
"If you're talking about a reduction in force ... it's going to have a very severe impact on the services that the different departments can deliver to the communities," Lui-Kwan told the committee.
The money from the Block J sale is already used to balance the current budget, he said.
After the meeting he said, "If they approve the expense but don't raise the revenues to pay for it, the only alternative, really, is to cut services."
