The city is trying to avoid cuts in services and higher property taxes to address a deficit that may hit $40 million, due chiefly to falling property values.

Honolulu Mayor Wants Money From Traffic Fines

 

Honolulu City Police Department issues traffic tickets for speeding and other infractions, but the state keeps all the money because the state courts collect the fines.

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  “;We'll be seeing a shortfall,”; said Mayor Mufi Hannemann. “;It could be anywhere from $13 million to $40 million. On the surface, it may seem very small, but next year (fiscal year 2011) is when we're really going to take a major hit, with over $100 million.

“;We're trying to be as prudent as possible, only spending on things that are essential,”; Hannemann added. “;We're doing everything possible to make sure we don't have to cut services.”;

Hannemann has already asked city departments to slash their budgets by 2 percent to 3 percent. He froze any additional hiring and put a ban on most travel by city employees.

In an earlier interview, Hannemann has said he is considering all options, which include raising property taxes, as he works through the city's budget for the fiscal year that begins in July.

“;We're saying everything is on the table, especially when it comes to cuts,”; Hannemann said. “;We're not yet ready to say when we're talking about new revenue opportunities. I think the public, the (City) Council and I want to be convinced that we cut as much as we can cut before we ever broach that idea. But there's no question that our revenue stream is not going to be as high as it used to be.”;

Oahu's real property assessments have remained relatively flat from last year. But the city is bracing for substantial drops in value next year, which will lead to a significant decrease in real property taxes - its largest revenue source.

Mark Oto, city deputy budget director, said the focus is on cutting current expenses before looking at increasing property taxes.

“;We're trying to do what we can with our current scenario,”; Oto said. “;Our focus is what can we do in house and then we talk about different revenue sources.”;

Hannemann has until March 1 to submit a balanced budget to the City Council, which has the final approval on the city's spending.

City Council Budget Chairman Nestor Garcia said it is too early to comment on the budget since Hannemann hasn't finalized it.

City Councilman Duke Bainum said he is concerned about the possible deficit but added that it would be inopportune to increase taxes for residents during this economic recession.

“;It's the least desirable time in talking about raising real property taxes,”; Bainum said. “;I think we have to enter this budget cycle saying that nothing is sacred, meaning that public health and safety maintain to be our top priorities. Even within those, programs that might be liked or loved have to be considered to be cut as well.”;

Hannemann and the mayors from Maui, Big Island and Kauai presented their annual “;wish list”; yesterday to the state Legislature of projects they want the state to fund.

Their efforts in the past for funding have had little success. With the state's potential looming $1 billion deficit, the mayors expressed little hope in receiving additional help from the state.

The state is also considering all options to alleviate its deficit, including pulling the county's portion of the state's tourism tax revenue, called the transient accommodations tax. Honolulu receives about $45 million in its share.

“;Certainly we recognize that they'd (the state) be hard-pressed to find every penny that they can find,”; Hannemann said. “;Taking the TAT, a portion or all of it, would really exacerbate our situation.”;