In light of Mayor Kirk Caldwell’s announcement Friday that the state’s unionized police officers will be earning 16.8 percent more by 2017, Honolulu leaders are looking for creative ways to raise city revenue.
City Council Budget Chairwoman Ann Kobayashi said Saturday that the Council hopes to increase the city budget without affecting residential property taxes.
Kobayashi said city leaders were initially caught off guard by the arbitration agreement with the State of Hawaii Organization of Police Officers, which represents roughly 2,900 police personnel in Honolulu and the counties of Kauai, Maui and Hawaii, but that enough money was set aside in the budget that began July 1 to cover this year’s salary increases.
SHOPO members will receive 4 percent raises each year, amounting to an overall 16.8 percent increase, but other terms are not yet known, she said.
"We kind of knew it would be about that, but we didn’t know how many years and it’s compounding," Kobayashi said. "When you think about all that, plus the amount we have to put into the health fund, it’s challenging."
Among 10 bills related to amending Honolulu’s property tax laws that will be up for first reading at the City Council meeting Wednesday are proposals that would amend property tax exemptions for certain nonprofit organizations, government employee unions, federal credit unions, and other groups to be a percentage of the property’s assessed value, rather than a complete exemption. The measures would also change the "hotel and resort" real property class to "hotel, resort and transient," and classify all real property used as transient vacation, bed-and-breakfast, time share and fractional ownership units as such.
"We’ve been talking about it, wondering what the final number would be, so we’ve been preparing for this," Kobayashi said.
SHOPO President Tenari Ma’afala said he could not confirm the figures announced by Caldwell because the union isn’t discussing any terms until its board has convened.
Of the union’s 2,900 members, Ma’afala said, about 1,900 work in Honolulu, around 120 are Kauai County officers, and roughly 380 are based in Maui and Hawaii counties.
The counties don’t yet have concrete estimates on exactly how much the pay raises will cost, but some have an idea.
Kobayashi said Honolulu budgeted for about $40 million this fiscal year and that a similar amount will also be needed in coming years.
Hawaii County spokesman Kevin Dayton said the island’s council estimates about a $3 million cost related to the increases, and that "we’ll be honoring the raises."
Maui County spokesman Rod Antone had a similar take on the issue, saying that "the level of the award was a surprise, but we must respect the arbitrator’s decision."
He added, "It’s not expected to affect anything this year, but next year’s a different story."
Kauai County spokeswoman Mary Daubert said the county had just received the SHOPO arbitration decision Friday and had no comment.
A police recruit working in Honolulu currently earns $51,240 per year, with an increase to $53,268 per year as an officer and fringe benefits such as nighttime pay, overtime and meal allowances for overtime, and hazard pay. Under the announced agreement, that yearly base salary for recruits will wind up being $59,941 by 2017.
Ma’afala said SHOPO members haven’t received a raise since 2011, when their previous four-year contract ran out. That contract included 6 percent yearly raises for four years, he said.
Ma’afala said the union worked for two years without a contract because "our stance was we’ll agree to the two years (of no contract), but we’re not going to agree for a 5 percent pay cut as well as a 50/50 medical split" like many other government employees.
He said that of 900,000 calls for service received by first responders on Oahu in 2012, about 70 percent were fielded by police; the percentage was similar for 2011.
"That basically tells you what officers go through every day, aside from the fact that our lives are on the line and that we have to, in many cases, make a split-second decision to save a life, if not lives, in many cases," he said. "There is no amount of money that can replace anyone’s life."
The bulk of United Public Workers and Hawaii Government Employees Association workers have also ratified contracts that included roughly 4 percent annual pay raises for two or four years and a 40 percent share of their health insurance premiums, down from 50 percent.
When those terms were agreed to around April, the Caldwell administration said it was projecting similar multiyear, 4 percent increases for SHOPO and the Hawaii Fire Fighters Association.
"They usually kind of track each other, so we’re thinking it’ll be about the same," Kobayashi said Saturday.
Lowell Kalapa, president of the Tax Foundation of Hawaii, agreed that the city should look at amending its property tax exemptions to help cover costs, and said it will be important for the counties to communicate to residents what they’re paying for.
"Maybe (it will) reconnect peoples’ thinking with the fact that property taxes do affect us, and the cost of running county government does come back to us," he said.
