City budget OK'd, conflict lingers

The City Council passed a $1.638 billion operating budget and $789 million construction budget yesterday

Mayor Mufi Hannemann says he's pleased with the City Council's passage of the city's $1.638 billion operating budget and $789 million construction budget yesterday.

"I think it addresses all the priorities we set out to do -- save some money, we wanted to make sure we met our fixed costs, salary increases, and take into account new things," Hannemann said. "At the end of the day, we got what we want."

But the mayor also assailed Council members critical of the record spending in the budget and the increase in taxes for businesses. He called Councilman Charles Djou a "hypocrite."

"He cannot have it both ways -- he talks about fiscal restraint, accountability, yet he wants us to fix the sewers in his district and he wants to do curbside recycling and he votes against the budget. Go figure that one out," Hannemann said.

Djou countered that he disagrees not only with the amount of spending but also the priorities.

"City government simply cannot exceed government spending by double-digit margins year after year after year no matter what name Mufi Hannemann wants to call me," he said. "I'm not going to get into a tit-for-tat, name-calling contest."

Hannemann also said criticism of the budget by Councilman Donovan Dela Cruz stems from Dela Cruz's hope to see Council Chairwoman Barbara Marshall overthrown: "It's all about wanting to be Council chair again, so he'll just disagree for the sake of disagreeing and hopes that Barbara Marshall gets toppled so he can make another power play."

In the 6-3 vote approving the operating budget, Djou, Dela Cruz and Councilwoman Ann Kobayashi voted "no." They noted that the operating budget and the measure that lowers the tax rate for residential properties by 30 cents to $3.29 per $1,000 in value also increases the rate for commercial, hotel and industrial properties to $12.40 from $11.97 per $1,000 assessed valuation.

They argued the approved rates will not go far enough to bring down taxes for residential property owners to counter rising assessments, and the increased tax rate for business properties will be passed on to consumers.

"This is nonsensical. It's as if we are putting some small pocket change in the left pockets of the taxpayers and we're immediately turning around and pulling out that money from their right pocket," Djou said.

"I remembered reading ... the proposal to have the property tax rate go below $3. And what happened to that?" asked Kobayashi. "We have not reduced the cost of running government. The only reason we were able to reduce the residential rate by 30 cents is just by moving money around. ... We did not make any substantial cuts."

Opposition to the increase in business property tax rates also came from the public.

"I believe this (resolution) just absolutely offers no tax relief," said Bob Kessler of Let Honolulu Vote, a group that wants to get tax issues on the ballot. "You have benefited from enormous windfall of tax revenues ... and you have let the budget grow to consume those resources."

Djou said operating budget again is going up by double digits about 10 percent higher than last year's.

"Spending has been going up and up and up and up and we cannot afford it," Djou said. "It's about time we turn off the spigot on a drunken sailor spending at City Hall."

Hannemann pointed out that the budget he sent the Council earlier this year was less than what the Council approved.

He said the increase in the property tax rate for commercial rates was because of the dip in residential rates.

The operating budget also includes increased sewer charges and higher salaries for city employees.