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BUDGET BATTLES


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Plan would gut economic development, arts offices

By Gordon Y.K. Pang

POSTED:
LAST UPDATED: 02:43 a.m. HST, Apr 13, 2011



The city Office of Economic Development and Mayor’s Office of Culture and the Arts remain on the chopping block after a recommendation by the City Council’s Budget Committee yesterday.

MAYOR’S BUDGET PROPOSAL

» Operating budget: $1.932 billion
» Capital improvements budget: $526 million (not including transit)

TAX PROPOSALS UNDER DISCUSSION

» Homeowners: Give one-time tax relief to property owners who missed a deadline to dedicate their lands as residential.
» Historic homes: Eliminate, put on hold or overhaul tax exemptions given to historic properties.
» Nonprofits: Increase the minimum tax of $300 paid by nonprofits and others, or limit what can be exempted.
Proposals call for eliminating all but bare-bones funding for each of the two agencies. The Carlisle administration opposes the cuts, saying vital work would be left undone.

Budget Chairman Ernie Martin is suggesting a cut of $337,979 from the Office of Economic Development’s $476,156 budget. Budget Vice Chairwoman Tulsi Gabbard Tamayo is proposing a $303,536 cut from Culture and the Arts’ $345,188 budget.

Martin said the decisions are preliminary.

The Council will reassess the situation after a public hearing scheduled for next Wednesday.

“I’m open to reconsideration after the public hearing,” he said. But he noted that there is much public pressure to prioritize funding so that roads can be fixed and parks can be better maintained.

Directors from both agencies defended their work.

“This reduction, along with any other proposed reductions ... would essentially eliminate all activities for OED with the exception of the film office,” said Ann Chung, executive director of the Office of Economic Development.

The office promotes, among other things, international tourism and trade, she said.

Kaleve Iosefa, tapped as executive director of culture and arts two months ago, said her agency is tasked with maintaining the artwork at City Hall and other municipal buildings.

“Without adequate staffing, mandated services such as the Arts in the City program will be compromised,” Iosefa said.

Last month, Mayor Peter Carlisle proposed a $1.932 billion operating budget for fiscal 2012, up $114 million from the current fiscal year, which ends June 30.

Measures aimed at suspending or doing away altogether with property tax exemptions and minimum taxes passed out of the City Council Budget Committee yesterday.

But Martin stressed that he was keeping the bills alive only in the event that the state Legislature decides to keep about $40 million in hotel room taxes from the city.

Martin said what he really wants to do is convene a blue-ribbon commission of experts to review the city’s entire tax system, including exemptions and credits, and offer independent, nonpolitical recommendations for reform.

Such a review should be conducted at mandated, regular intervals, he said.

Much of the morning discussion centered on historic homes. Several property owners argued that they should be given breaks for preserving properties for future generations.

But Holly Huber, who has questioned the breaks, pointed out that many are not even visible to the public, much less accessible.

There are an estimated 255 residential properties each paying the city the $300 minimum. In all, the city loses about $1 million annually as a result.

Historical properties are only a small portion of those paying the minimum. City Budget Director Michael Hansen said there are 13,000 parcels paying the minimum. If the city were to raise the minimum to $400, the city would generate an additional $1.3 million, he said.






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