A $5 million subsidy for the Oahu commuter ferry, better known as TheBoat, was among the early casualties as the City Council Budget Committee began crafting the city's operating budget for the fiscal year that starts July 1.

The committee also advanced Mayor Mufi Hannemann's proposal to increase the real property tax rate by 30 cents, placing it at $3.59 per $1,000 of property valuation.

Along with increases in various city fees, the administration and Council are aiming to close a $50 million budget gap in the coming fiscal year.

Budget Chairman Nestor Garcia also proposed a series of spending cuts, including money set aide for the mayor's contingency fund, the Honolulu Commission on Culture and the Arts and the Honolulu City Lights program in the Department of Customer Services, among others.

Garcia has said he wants to start a discussion about the possibility of trimming the size of government.

The proposal to cut $5 million for TheBoat was suggested by four Council members. Since its launch in September with help from a $5 million federal grant, TheBoat has been plagued by mechanical problems, which have led to low ridership.

“;Given our current fiscal picture, we cannot afford a $5 million system that costs taxpayers over $120 a person for a round trip,”; Councilman Charles Djou said. “;We need to tighten our budget, and TheBoat is beyond our community's fiscal means.”;

Hannemann's administration is studying the ferry project and expects to release a report by the end of the month. The mayor has said he would discontinue the service if it proved too expensive.

Steeper cuts might be necessary.

Council budget talks come as state legislators prepare to pass various budget proposals, including one that would divert the hotel room tax — a key source of county revenue — to help make up the state's own budget shortfall. Oahu's share of the hotel room tax would be about $43 million.