Honolulu Mayor Rick Blangiardi unveiled a proposed $3.41 billion operating budget for next fiscal year that prioritizes building affordable housing, strengthening public safety, funding improvements for infrastructure and mass transit services including rail, and aiding the post-pandemic recovery of Oahu.
Submitted on Thursday to the Honolulu City Council, the mayor’s budget, which would take effect July 1, includes a $1.09 billion capital improvement program to fund park improvements, upgrade public buildings including the Honolulu Police Department’s Alapai headquarters and invest in more electric vehicle charging stations around the island.
Of more urgent concern to many residents is the administration’s request to provide property tax relief to about 151,750 qualifying homeowners in the form of a one-time $300 tax credit, which the city administration says equates to an additional, one-time homeowner’s exemption of approximately $86,000.
The proposed tax credit, funded in total for approximately $45.5 million, could be applied directly to property tax bills before they are distributed this summer.
“We are now coming into our own as an administration, and this budget is reflective of our top priorities with respect to people, housing and public safety in a very difficult economic climate,” said Blangiardi during a Friday morning news conference at Honolulu Hale. “And so there was a lot that we wanted to look at, and that allowed us to take on the problems and challenges head-on, address those and at the same time give us the room to move, if you will, strategically in the areas that we really feel are extremely important for the well-being of our city.”
Andrew Kawano, director of the city Department of Budget and Fiscal Services, later said the mayor’s fiscal year 2023-2024 budget is an approximately 6.2% increase over the current budget of $3.22 billion, while the proposed CIP spending plan represents a 6% increase over the current $1.03 billion CIP budget adopted in 2022.
“Both budgets focus on the affordable housing crisis,” Kawano said. “And for the first time, actually, we have a proposal for a broad-based capital improvements appropriation of $100 million to help fund the acquisition, development and construction of more housing units on our island and work with the state to increase our inventory of affordable housing.”
The rollout of new affordable housing will be a “multiyear task,” Kawano added.
The proposed CIP budget also would fund $6 million for affordable-housing infrastructure planning in such places as Halawa and Iwilei, and $8.4 million for the Affordable Housing Strategic Development Program to be used for the renovation and/or development of low-income housing units, according to the city administration.
Budget items to tackle homelessness include $10.2 million for the Housing First Initiative; $1.5 million for services related to the Hale Mauliola Housing Navigation Center at Sand Island; $1.4 million for the Home Investments Partnerships program, which provides rental subsidies that serve approximately 100 people experiencing homelessness; and $1 million for services at the Punawai Rest Stop in Iwilei.
Another $1 million would go to continuing the city’s Crisis Outreach Response and Engagement, or CORE, program. Launched in 2021, CORE responds to nonviolent, homeless-related 911 calls in downtown Honolulu, Chinatown and Waikiki. CORE teams include emergency medical technicians and social workers to assist homeless people with immediate health care needs, shelter and other support services.
With regard to public safety, the fiscal year 2023-2024 budget proposes $591 million to fund Honolulu police, fire and emergency services as well as other public safety programs. In addition, the CIP budget earmarks $7.5 million for improvements to HPD’s Alapai headquarters on South Beretania Street and other police stations, and $5 million for fire station improvements.
Under public transportation, Honolulu’s mass transit programs would receive $411.3 million, or about 12.06% of the budget, a figure that includes $85.1 million for the annualized operating and maintenance cost of Honolulu’s pending rail system. The first leg of the rail system — from East Kapolei to Halawa’s Aloha Stadium — is expected to open by summer.
Blangiardi’s proposed budget also includes $87.3 million for acquisition of new vehicles for TheBus and TheHandi-Van, while a combined $46 million was designated for road rehabilitation and road resurfacing across the island. An additional $33.2 million would be allocated for planning, design and execution of computerized systems meant to connect all forms of Oahu’s public transportation infrastructure.
Spending for city parks includes $11.9 million in CIP funds for various improvements and $7.3 million for roof repairs, parking lot repaving, refurbishing of gym floors, court resurfacing and other miscellaneous repairs. Also, the city would use $5.5 million of Community Development Block Grant funds in order to complete multiyear park improvements within eligible neighborhoods, according to the administration.
The city’s proposed CIP budget would see $506 million devoted to wastewater and “global consent decree” projects, amounting to more than 51% of all proposed capital improvement expenditures for next fiscal year. Other CIP proposals are $11.9 million for infrastructure and charging stations for electric vehicles, $19.8 million for a variety of drainage and erosion control projects and $6.9 million for the modernization of Oahu’s traffic signal control systems.
Overall, the largest single category of expenditures in the proposed operating budget — $783.4 million — relates to city employee benefits. According to the city, those include nondiscretionary costs such as retirement contributions for employees, health care and post-employment benefits.
The city has plans to invest in its workforce, too.
In doing so, it intends to reduce systemic vacancies — pegged at about 3,000 positions — across all city departments. The proposed budget includes an $81.2 million increase in salaries for the next fiscal year as well as $28.2 million more in retirement contributions.
According to Kawano, the city administration will go before the Honolulu Salary Commission to discuss pay increases for city employees, including department directors and deputy directors — something the administration says has not happened in the past three years.
“But that’s still up in the air,” Kawano said.
He stressed that the city is bouncing back from the damaging effects of COVID-19 on the local economy.
“I have to say where we are today, financially, is we’re in a much better place than we were a year ago and obviously two years ago during the pandemic,” he said.
Meanwhile, starting Monday and lasting through the week, the City Council is expected to begin deliberating Blangiardi’s proposed budget for the next fiscal year. The meetings will include formal budget presentations from respective city departments inside Council chambers.
In a statement Friday, Council Chair Tommy Waters said that with rising housing costs and spiraling prices, Council members will take a close look at the administration’s spending proposals “to ensure we are providing relief and essential services for our local residents. This budget will also be a great opportunity to prioritize filling vacancies so we can provide the necessary services. I will be focused on ensuring that this budget prioritizes our need for affordable housing, increased public safety, and measures to protect against the effects of climate change.”
Committee on Budget Chair Radiant Cordero encouraged public participation in the budget process. “With the increased property tax assessments and longstanding City-wide issues that need to be addressed, we must consider long-term solutions to not only provide relief to taxpayers but also prioritize our city infrastructure and services — all while adopting a balanced budget,” she said Friday in a statement.
