Rein in costs before raising city taxes

The creation of the city Department of Land Management arguably has a rational purpose: to enable the more efficient delivery of affordable housing that Honolulu desperately needs. That undoubtedly was the principal reason the City Charter amendment to establish it won voter support in November.

But its launch, requiring approval by the City Council, seems designed more for efficient delivery of larger government rather than housing. At least this part of Mayor Kirk Caldwell’s budgetary blueprint — including 20 positions for the new agency — must be scaled back.

The proposal was part of the $2.45 billion operating budget Caldwell announced Thursday, including new “revenue enhancers” tapping Oahu residents. These would include a new monthly fee of $10 for trash pickup, as well as increases to bus fares and in selected property tax categories for the next fiscal year.

Officials maintain that anticipated cost increases in debt service, employee retirement benefits and labor contracts are what’s behind the tax and fee hikes, as follows:

>> Property taxes would go up by 30 cents per $1,000 of assessed value for Residential A properties. These are homes valued at more than $1 million that do not have owner-occupant exemptions. An additional $6 million could be raised here in the next fiscal year.

>> Taxes would rise by 50 cents for every $1,000 for hotel and resort properties, due to bring in $6 million more.

>> Bus-fare hikes of 25 cents for single-ride fares yearly over four years and $5 increases for each senior annual passes arguably are the most defensible in that fares have not gone up across the board since 2010 and the senior pass price is still eminently reasonable. Further, mandates attached to a federal transit subsidy require fare-box collections to cover certain proportions of total costs.

In fact, all the increases could be supported were it not for one fact: The Caldwell administration is not making a decent effort to contain costs at the same time.

Exhibit A: the inaugural budget request for the land management agency.

“We did look at what we could do to minimize expenses, and I think we did a pretty good job,” said Nelson Koyanagi, city budget director.

Oh, really?

Before the general election during which the charter amendment authorizing the department was approved, the notion of the new agency was sold as a means to cut bureaucratic delays.

The city has lacked a housing department for three decades; it was shuttered in the aftermath of a corruption scandal. Following its dismantling, the expertise required for development was either dispersed altogether or scattered among multiple city offices.

In the run-up to the election, the mayor pitched the idea as a way to consolidate housing expertise under one roof, minimizing duplication of effort, delays and resultant waste.

This actually was not the first time his administration tried to pull together staffing for this mission. Two years ago the City Council declined to fund Caldwell’s request for eight positions in a planned Asset Development and Management Division.

Now Caldwell is pushing a 20-person budget request, seemingly emboldened by the passage of the charter amendment.

In an op-ed published before the election, Managing Director Roy Amemiya said projects can involve up to four departments. Bureaucracy and duplication are the consequences.

It appears that stocking up on new hires, with all the attendant salary and benefit costs, would simply add a new layer to that mess. Reorganizing city government to achieve peak efficiency should be the plan.

On Friday, the mayor defended his revenue-enhancement plan, which has drawn criticism from some on the Council. He pointed to a decline in resources that cover costs such as road maintenance, debt service and other city responsibilities

Trash collection, for example, costs about $50 per home each month, according to officials. This is for single-family homes equipped with the standard three bins — one for trash, one for recyclables and one for green waste.

Under the plan, the $10 monthly fee would cover that standard load, rising to $12.50 for four bins and $15 for five. That means the city is still subsidizing at least part of the costs on all homes, so implementing a fee could be a rational step.

However, Caldwell also cited the increasing outlay for salaries and retirement. Where’s the sense in bemoaning such things in a plan that increases them further by padding the employee rolls excessively?

In general, new fees and taxes may in fact be needed to cover increasing costs, especially given that rail construction costs haven’t even been factored in. But before imposing them, the city owes the taxpayer a supreme effort to rein in expenses. With this plan, the administration falls far short of fulfilling that duty.