Mayor pushes record budgets

Hannemann's plan focusing on spending for basic services draws mixed reviews

Mayor Mufi Hannemann's proposal for big increases in the city budget has some councilmembers wondering how the city will pay for it.

Hannemann's Proposals Here are some highlights from Mayor Mufi Hannemann's State of the City address yesterday: » A proposed $1.49 billion operating budget. The increased budget is a reflection of increased debt service, pay raises, rising energy and fuel costs, filling manpower needs in parks, road repair and other services. » A proposed $629 million capital improvement budget. More than half of the budget is for sewer and waste projects. » A community benefits package of $2 million for Leeward Coast residents who have to live with nearby landfills. » A cooperative effort with local banks to offer a property tax financing package to help taxpayers pay property taxes. It is similar to a home equity line of credit and a savings plan similar to a Christmas account. » Replacing Oahu Civil Defense Agency with an Office of Emergency Management. » Starting a 311 call center so that nonemergency phone calls will not clog the 911 emergency line. » Renovating the Blaisdell Center arena to upgrade air conditioning and replace the risers. » A Chinatown summit in the spring to offer ideas on how to revitalize that part of downtown.

While some councilmembers said they understood why Hannemann's State of the City address yesterday included proposals for a nearly $1.5 billion operating budget and $629 million in capital improvements, they also expressed concern about the impact that spending might have on property taxes.

"It's huge and it's not sustainable," Councilman Charles Djou said of the proposed budgets.

The mayor is expected to submit those budget proposals to the Council next week.

The proposed operating budget for the next fiscal year is 10 percent higher than the current fiscal year's, while the construction budget is around 32 percent higher.

Councilman Gary Okino said he thinks the mayor has a good reason for proposing such a budget.

"I think his focus is good: basic services. He says 'no frills' and I think that's true," Okino said. "Actually, I was expecting around 10 percent ... because of all the fixed costs. I think one of the biggest things besides salaries is the debt service.

"It's only going to get worse."

In his hour-long speech before the Council, Hannemann talked about what he has done to attack the problems with roads, sewers and garbage during his first year in office, and he also outlined some future challenges.

He also said rising fixed costs and maintaining services means that the city cannot afford to forgo collection of the additional taxes brought in by the higher property assessments.

"First, as a community we have to decide how much we're willing to pay for what we receive. Public services are not an entitlement; everything has a cost," he said. "If we're willing to do with less, we can cut property taxes, we can reduce fees."

Council Chairman Donovan Dela Cruz said the mayor also was convincing in pointing out how he has moved to cut the city's costs by looking at things such as partnering with the private sector to share expenses.

"We've got to look at the entire budget, but I think what's important to note is that he said if we don't fix some of these problems now, they're going to cost the taxpayers even more later," Dela Cruz said.

Djou said one of the notable things about the mayor's speech was that he did not propose any bold new initiatives like his predecessor, Jeremy Harris.

"That's not a bad thing, because I don't think the city can afford to doing many big, bold things now," he said.

Council Budget Chairwoman Ann Kobayashi called the speech "upbeat and positive," but she is also mindful of the backlog of projects the mayor needs to undertake.

At the same time, however, she said she is concerned that the increased capital improvement budget -- funded primarily by bonds -- will mean that the city's debt will go up even further. She said it might require that the Council scrutinize any extra spending and come up with other ways to reduce the debt.

Part of Hannemann's budget proposal will also include $2 million for a yet undefined community benefits package for the Leeward Coast for being burdened with the Waimanalo Gulch Landfill.

Djou said he is still waiting to hear what the mayor plans to do on the landfill, recycling and property taxes.

"I was waiting for the mayor to make the next step," Djou said.