[ OUR OPINION ]
Ultimately, residents will
pay for soaring city costsEVEN though Honolulu residents may not see direct increases in the price of living in paradise, they likely will have to pay more indirectly if commercial property tax rates go up. Unless the City Council can judiciously pare back Mayor Harris's budget proposals and residents accept fewer services and improvements, the cost of running Honolulu will rise.
THE ISSUE
Mayor Harris proposes an operating budget that includes a 7 percent boost in commercial property tax rates.
Harris's spending bids for the fiscal year that begins in July will kick off the predictable wrangling between the mayor and the Council and among members themselves. With five of the nine up for re-election this year, taxpayers can expect squabbling over the budget to be heated.
The mayor proposes to fund city operations, pegged at $1.22 billion, primarily by raising the tax rate for industrial, commercial, hotel-resort and unimproved residential properties by 7 percent and by selling off city-owned property.
As he had promised earlier this year, Harris did not call for increases in taxes for single-family homes and apartments, which would have touched residents directly. However, higher rates for commercial property will probably be passed from businesses to consumers. One way or the other, residents will take the hit.
The practicality of selling city properties will have to be evaluated carefully. The administration argues that the costs of managing and maintaining such holdings justifies their sale. On the other hand, the revenue they bring in can be relied on through the years while selling them draws a one-time benefit. For example, the recent $10.5 million sale of Block J in downtown Honolulu will cover expenses for the current fiscal year, but the city has lost an asset that had income potential for the long term.
The mayor is also seeking to spend $286.5 million for upgrades in the sewage system, streets and roads and bus transit units, all sorely needed. These improvements are among the core services city government should provide and cannot be further ignored. The Council should not steal away funds for such projects.
Also important is Harris's trash recycling proposal, which the Council has yet to fully endorse. A pilot program in Mililani indicated that with suitable containers and education, recycling can have a significant effect on the amount of garbage that ends up in landfills. Last year, Harris tagged on a monthly fee for additional pick-up of non-recyclable material, but the Council balked and it was not part of this year's proposal. However, the mayor's budget does include a boost in "tipping fees" -- what commercial companies pay to dispose of trash at city landfills -- that he expects will raise about $6 million.
Most of the $47.9 million operating-budget increase is needed to cover the city's labor costs, but the proposal does not include anticipated raises for employee contracts still being negotiated. The administration and the Council should address this in budget discussions and not leave the issue for last-minute resolution, which was the case with the police contract in December.
With no immediate political goals in sight, Harris has only his mayoral legacy to protect. Not so with the majority of the Council. Nonetheless, politics should take a back seat in budget calculations.
