Mayor has
$1.35B plan

Hannemann's budget includes
a 50% hike in vehicle taxes
and higher Blaisdell fees

It would cost more to register your car and hold graduations and concerts at the Blaisdell Arena complex under the city budget unveiled yesterday by Mayor Mufi Hannemann.

City & County of Honolulu

$1.35 billion plan

Highlights of Mayor Mufi Hannemann's budget for the 2006 fiscal year, which begins July 1:

» $1.35 billion operating budget, which is up by 10 percent from the current budget of $1.22 billion. Additional costs are for health insurance, retirement, debt, pay raises and new or expanded services such as curbside recycling and bulky item pickup.
» $451 million capital improvements budget, up from the current $298 million budget. About half the budget is going toward sewer repairs.
» Proposal to raise passenger and commercial vehicle weight tax by a penny each to 3 cents and 3.5 cents per pound, respectively. An estimated $22 million in additional revenue will be generated.
» Increase in rental rates at the Blaisdell Center and the Waikiki Shell.

But the budget goes a long way toward fixing sewers, patching potholes, improving customer service and playing all-around maintenance catch-up, Hannemann said.

Noting he's not paid to be a "shrinking violet," Hannemann proposed a $1.35 billion operating budget for the fiscal year beginning July 1 -- a 10 percent growth over the current fiscal year budget of $1.22 billion. The budget proposal includes a 50 percent hike in the city vehicle weight tax and increases in the Blaisdell Arena complex rental rates.

"I recognize that not everyone's going to be happy with our decisions, but I feel they were very well thought out," Hannemann said.

Hannemann is also proposing a $451 million capital improvements budget, a 50-percent increase over the current construction budget. About half of the budget would continue sewer repairs as the city works to comply with a 1995 federal consent decree to improve its system.

"Unfortunately, everything is coming to a hilt at this (in) 2006," said Eric Takamura, director of the Department of Environmental Services. "If we don't get any more consent-decree conditions, the amount of construction we do in the future will tail off, but as you know, the question is: Can we maintain it?"

The vehicle weight tax would go up a penny to 3 cents per pound. A car weighing 2,500 pounds would see weight tax charges jump to $75 from $50 a year and a heavier vehicle like a 5,000-pound sport utility vehicle would see a hike to $150 from the current $100 a year. Commercial vehicles would also see a penny per pound hike to 3.5 cents per pound.

The weight tax is paid annually along with other car registration fees and taxes. If approved by the City Council, the tax hike would go into effect Jan. 1.

Hannemann said the $22 million in additional revenue generated from the tax would be used to fix the roads and to provide a needed subsidy to TheBus, which saw operation costs jump by $11 million to $88 million mainly due to rising fuel costs.

The last time the vehicle weight tax went up was on Jan. 1, 2004, to help fund pay raises for police officers.

Meanwhile, the hike in the fees to rent the Blaisdell Arena, concert hall, exhibition hall and the Waikiki Shell will bring an additional $45,000 in revenue next fiscal year, but by the year 2010 the increase in revenue will jump to $254,000, said Sidney Quintal, who oversees the complex as the director of Enterprise Services.

For-profit organizations' rental charges would rise to just under $4,700 a day from the current $3,300 rate next fiscal year. The rates last went up in 2004. Nonprofit groups will see rental rates climb to $1,288 a day from the current $788, but within five years that fee would go up to $3,300. Rates for these groups last went up in 1987.

The Honolulu Symphony and nonprofit groups opposed the last proposed rate hike because the increase would cause financial hardship.

Quintal said the Blaisdell complex needs repairs to its air-conditioning system and other infrastructure, and the administration is trying to bring the fees in line with costs.

But City Council Budget Chairwoman Ann Kobayashi said: "I know the city needs money but there's certain things that we have to protect."

The increase in the operating budget is fueled by retirement, pay, health and debt increases, city officials said. Hannemann is also spending more to implement curbside recycling and expand bulky item pickup service and putting in $1 million for asphalt in pothole repairs.

But Kobayashi said the Council would still like to give a property tax break to more people and may need to make cuts to accommodate that.

Councilman Charles Djou said: "My biggest objection of course is a tax increase. ... The remedy is not increase spending. The remedy is tighten your belt and cut back on spending."

City & County of Honolulu

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