Looking ahead at the task of crafting the city's budget for the fiscal year that begins July 1, City Council Budget Chairman Nestor Garcia offered a grim assessment.

“;It looks bad,”; Garcia said yesterday after his committee heard from experts on the state of the local economy.

His panel will spend the next few months trying to come up with a plan that maintains core services in what is described as the worst recession since the Great Depression.

Mayor Mufi Hannemann has proposed increasing property taxes and various fees to help stave off budget deficits.

“;I'm not saying right now I'm going to increase all that,”; Garcia said. “;But we need to take a look at the 2010 budget and see whether or not we need to continue to take an even harder look at not just property tax revenue, but other sources of revenue.”;

Hannemann proposes only an increase of the residential property tax rate, boosting it 30 cents, to $3.59 per $1,000 of property value. It does not include increases hotel/resort, commercial and industrial properties.

“;Since I've been in office, that's the only class that I've consistently raised their taxes — everybody else has gone down or flat,”; Hannemann said. “;I felt that because of these tough, challenging economic times, and because many of those businesses employ workers, why throw an additional burden on them?”;

Garcia said he hopes to have a discussion in his committee on whether the tax hikes should be limited to residential property owners and whether more fees are needed to cover specific services, such as garbage pickup.