Mayor’s budget plan, tax and fee hikes get initial OK by Council

Mayor Kirk Caldwell’s $2.45 billion operating budget proposal and an accompanying slate of measures raising various taxes and fees won initial approval from the Honolulu City Council on Wednesday.

The planned increases would affect Oahu residents in a variety of ways, and include hikes on bus and para-transit fares, the fuel tax, property tax rates for non-kamaaina and hotel-resort owners, and a new monthly fee for garbage pickup.

Several Council members voted against all of the measures, insisting they will not vote for any increases in taxes and fees that affect Oahu residents.

But despite the concerns raised, all of the bills and resolutions cleared the first vote, signaling that a majority of the nine Council members is at least willing to hear the argument for the hikes.

Attempts by Caldwell in previous years to raise the fuel tax and create a garbage pickup fee received the uncommon distinction of being shot down on first reading without committee hearings.

On Wednesday, Councilwoman Ann Kobayashi said she generally does not vote against any bills on first reading, but felt it was important to reject any measures “that add a burden to our constituents,” she said.

Councilmen Ernie Martin and Trevor Ozawa also expressed wholesale reservations about all the proposed tax and fee increases. Ozawa said the administration needs to do more to trim the budget to negate the need for tax and fee hikes, while Martin said he and his staff are scouring the budget to find where to cut on their own. Councilwoman Carol Fukunaga said she was troubled by those measures that proposed increases in taxes or fees on low-income residents or seniors on fixed incomes.

Councilwoman Kymberly Pine voted to give first reading on all the measures but said she would also be looking for cost savings to stave off some of the hikes.

The so-called “revenue enhancing” measures were also met with opposition from a smattering of Oahu residents.

Among the bills raising objections Wednesday:

>> Resolution 17-61, which would increase the city’s fuel tax for non-biodiesel fuel to 20 cents per gallon from the current 16.5 cents. Nanakuli resident Demont Conner said the increase would affect Waianae Coast residents disproportionately. “On the west side, we’re just gonna get smashed on this,” Conner said.

>> Bill 28, which would increase bus and para-transit fees for both single-ride and pass customers. Urban Honolulu resident Barbara Armentrout said many Oahu residents who rely on the Handi-Van won’t be able to afford to leave their homes. Armentrout warned Council members to anticipate a swarm of telephone calls in the coming weeks.

>> Bill 29, which would create a $10 per month garbage disposal fee. Waianae resident Kapua Keliikoa-Kamai said taxpayers already are paying for pickup service through property taxes.

>> Bill 25, the operating budget bill. Several testifiers objected to staffing for the new Department of Land Management and Office of Climate Change, Sustainability and Resiliency, both of which were created with the approval of City Charter amendments approved by Oahu voters in the fall.

The budget package, which includes a $956 million capital improvements plan, now goes to the Budget Committee.

The Council also voted 9-0 to give final approval to Bill 7, which would attempt to give a break on property taxes to many owners of Residential A properties but would result in increases for those who own the more expensive properties.

Residential A properties are those valued at $1 million or more and do not carry homeowner exemptions. The plan calls for a tiered tax system in which those owning Residential A properties valued at between $1 million and $1.5 million would pay less, while those with Residential A properties valued above $1.5 million would pay more.

Also on Wednesday, the Council voted to give final approval to Bill 3, which would remove a cap on the amount the city will use from the half-percent surcharge on Oahu of the general excise tax for the upcoming rail project. Fukunaga, Kobayashi and Martin opposed the bill.

A move by Ozawa to insert language requiring the Honolulu Authority for Rapid Transportation to submit to the Council quarterly reports on the project’s capital improvements program and cash balance summary was defeated.