City's spending plan pinches taxpayers hard
THE ISSUE
The Hannemann administration's proposed budget contains sewer fee increases and minimal property tax decreases.
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CITY taxpayers can be grateful that Mayor Mufi Hannemann has proposed what he describes as a
"no frills" budget because the spending plan still will
cost them a great deal more in fees and taxes.
Unlike his predecessor, Hannemann's funding blueprint is lean on "vision," long on nitty-gritty services. Nonetheless, punched-up increases in sewer fees that would double residents' expenses through the next four years and a small, one-time property tax return of $376 on owner-occupied homes next year will be hard to accept.
It will be up to the City Council to examine Hannemann's proposal. The mayor, who has presented the grim facts in a column on the cover page of this section, should be willing to answer questions straightforwardly and be open to reasonable changes.
Even though the plan might well be bare bones, taxpayers already are feeling the rising financial burden of city operations. The proposed increases in sewer fees and slight adjustment in skyrocketing property taxes come on the heels of a new tariff to pay for a $3.5 billion mass-transit project.
Almost half of Hannemann's $724 million capital improvement budget -- a 6.4 percent increase above current spending -- would go to sewer work, with another $40 million pegged for road repairs.
It is difficult to deny that Honolulu's sewer system needs extensive repairs and upgrades. In addition to the massive release of raw sewage in Waikiki last year, there have been hundreds of spills across Oahu, resulting in polluted streams and shorelines as well as scrutiny and fines by federal authorities.
In targeting the city's fractured roads, the mayor is responding to continual complaints from drivers.
Taxpayers, however, might argue that a 10 percent rise in the operating budget -- to $1.64 billion -- is too much, especially when they see that because of property valuations, they will collectively send $116 million more in revenues to the city treasury.
Hannemann has reserved a good chunk of that increase -- $23 million -- for employee pay raises, which have yet to be settled by arbitration. Moreover, the mayor wants to double to $20 million a reserve fund that includes future retirement benefits.
Meanwhile, homeowners feeling the property tax squeeze had hoped for more than the $376 the mayor proposes to give back. With tax rates remaining the same, even higher exemptions don't provide much relief. A better approach would be to re-examine the way valuations are set in the first place.
Commercial, hotel and industrial landowners also would pay more taxes under the mayor's plan. Residents won't feel the ripples in hotel rates, but they will be affected by higher prices for goods and services as businesses pass on their extra costs.
The mayor wants a big cut in rates for agricultural lands as a show of support for the industry. However, the Council should lower the rate only for land that is in active agriculture production as an incentive for large landowners to keep acreage green.
