Mayor proposes rise
in business tax rates

Harris’ $1.22 billion budget would
also raise "tip fees" paid by
commercial trash haulers

For the second straight year, property tax rates for businesses are targeted for increases to help balance the city's operating budget, which grew 4.1 percent from last year.

Mayor Jeremy Harris unveiled a $1.22 billion operating budget yesterday that includes a 7 percent increase in the property tax rate for commercial, industrial and hotel/resort categories. Last year, the various business rates increased up to 15 percent.

Some $6 million in new revenue will come from increasing the "tip fee" paid by commercial trash haulers, he said.

Harris also outlined a plan for an islandwide curbside recycling program that will not include a fee for recycling or garbage pickup.

Harris, who cannot run for mayor again because of term limits, said he is leaving the city in "excellent financial shape."

"I'm extremely proud of the budget," he said.

But Councilwoman Barbara Marshall said the mayor's budget was "too good to be true."

"I need to see the numbers," said Marshall, who is a member of the Budget Committee.

The $47.9 million increase in the next fiscal year's operating budget, which begins July 1, mainly comes from $37.3 million in rising labor costs including pay raises, health coverage and retirement.

Rates for nonresidential property categories will rise to $11.37 per $1,000 valuation from $10.63, generating an additional $13.5 million in new revenue for city coffers.

Harris is also proposing a 7 percent rate hike for unimproved residential property -- primarily vacant lots -- to $5.72 from $5.35, generating an additional $202,000 in revenue.

Single-family homes and apartments will not see a hike, primarily because assessments for residential properties jumped 17 percent.

Councilman Charles Djou, also a Budget Committee member, continued his long-standing opposition to raising taxes. He said dramatic cuts to the budget, privatization and a debt and spending ceiling are needed to avoid raising taxes.

"If the mayor thinks that by raising commercial tax rates that the average Joe won't pay for it is simply erroneous," Djou said. "Anybody who goes to the supermarket, anyone who visits a shopping mall, anybody who goes to a restaurant -- those are the people who are going to pay for it."

Harris said private trash haulers will be paying the city $9 more a ton for refuse disposal. The tip fee will go to $81 from $72.25, which will likely be passed onto customers that include businesses and condominium buildings.

"We're not doing this to pay for recycling," said Harris, who said that the curbside recycling is being handled within the budget.

Harris said the increase in tip fees is merely carrying out a City Council plan that the Council has delayed.

The plan for an islandwide curbside recycling program, which could start as early as this summer, includes issuing homes two more carts -- a 96-gallon green cart for yard trimmings and other green waste, and a smaller blue cart for recyclables such as newspapers, cardboard, glass, plastic and aluminum. Green waste and recyclables will be picked up on alternating weeks.

Households will also be allowed to keep a second day a week of general trash pickup. Last year, Harris proposed an $8 monthly fee for that second pickup, which the Council opposed. But this time there is no fee attached.

"I think it's fabulous," Marshall said. "But how are we paying for it when we didn't have the money to pay for it a week ago?"

The budget does not include raises for city employees represented by the Hawaii Government Employees Association, which is still negotiating a contract, Harris said.

Harris also delivered a $286.5 million capital improvement budget that includes $120 million for sewer system improvements, $40 million for streets and parking lots, $11.4 million in transportation items including new buses and bus rapid transit improvements, a $10 million appropriation toward a $15 million transitional homeless center, and $10 million for energy conservation improvements and solar energy initiatives.

Other highlights from the budget include:

>> An expansion of HPOWER garbage-to-energy plant.

>> Outlining a plan to sell city housing properties that could eliminate $117 million in debt and add $30 million to the city's "rainy-day fund."

>> A plan to enable low- to moderate-income residents to rent-to-own 311 city units.



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