The City Council has advanced a $1.8 billion city operating budget that includes funding for programs such as the Royal Hawaiian Band and Summer Fun, but also proposes to increase taxes on nonoccupant homeowners.

Council members voted unanimously yesterday to approve the budget, Bill 15, which had stalled on the chamber floor last month over a disagreement on whether to continue providing money for so-called vacant, but funded city jobs.

The new version, proposed by Councilman Donovan Dela Cruz, reduces money for jobs that have been vacant for two years and have not received administrative approval to be filled. It also reduces current operating expenses and transfers about $9 million into the city's rainy day fund.

Councilman Ikaika Anderson had sought further reduction in funding for vacant positions, arguing that the city should not be growing the size of government at a time when public workers face twice-monthly furloughs.

Budget Chairman Nestor Garcia said he agrees with city officials who say they need flexibility in hiring to provide core city services. He cited the upcoming Asia-Pacific Economic Cooperation conference, scheduled for Honolulu next year.

“;I've been hearing that we're going to have to try to come up with even more manpower and materiel to accommodate that convention,”; Garcia said. “;I want to be able to give the administration that kind of flexibility.”;

He expects both sides to continue making their cases as the bill comes back to his committee for further vetting.

“;The actual battle right now is not about parks and rec, the Royal Hawaiian Band and all that other stuff that we had the last floor session,”; Garcia said. “;Now the battle is, how big of a government can we afford? That's really the crux of it.”;

Anderson said he still hopes to persuade colleagues to reduce the amount of money for vacant, funded positions. The savings could then be put toward reducing the tax burden on nonoccupant homeowners.

To balance the budget, Mayor Mufi Hannemann has proposed a new real property tax class for property owners who do not live on their properties. He also proposed a new rate for that class: $3.72 per $1,000 of assessed value, a 30-cent increase from the rate paid now.

The new class is aimed at taxing speculators and investors who do not live in Hawaii. Opponents — including some Council members — say it could wind up increasing the burden on renters if property owners pass along the increase.

The Council still has to approve both the separate class and any new rate.

Anderson said he is hopeful savings will be found in other areas in order to keep any rate increase under $3.50.

“;I'm absolutely committed to lowering the tax rate for our nonhomeowners class, and I would hope that my colleagues could join me,”; he said. “;If the City Council is intent on not asking our city taxpayers for a penny more than is necessary to operate city government, yes, I do (expect them to agree).

“;If the Council is intent on just providing rhetoric to the public, then no, they won't.”;