Riders of TheHandi-Van are being spared a fare hike and owners of hotel and resort properties won’t get hit with a tax increase as a result of decisions made by the Honolulu City Council’s Budget Committee on Wednesday.
Advocates for both groups pressed Council members this week, arguing that the extra costs would severely hurt their constituents.
The committee first voted Wednesday to reverse itself on the decision it made Tuesday to increase TheHandi-Van’s per-ride cost to $2.50 from the current $2. Instead, if the budget plan is approved as is, paratransit riders will continue to pay $2 a ride.
Committee members said after hearing the pleas of paratransit riders Tuesday, Council staff found cuts to make up for an estimated $500,000 in revenues that the price increase was projected to net.
A recent study showed paratransit rides are subsidized by city taxpayers by an estimated 95 percent. But riders of TheHandi-Van and their advocates said that’s little consolation for a constituency that is most vulnerable to even the smallest of changes in monthly expenses.
Palolo resident Barbara Armentrout was in tears as she described to committee members the hardships of those with disabilities. “They want to feel like there’s nothing wrong with them, that they’re like everybody else, and they can’t feel like that,” she said, adding that many fellow paratransit riders are either reluctant or unable to voice their concerns.
The decision to cancel the planned TheHandi-Van fare hike does not affect TheBus riders, who more than likely will still need to pay $2.75 per ride, 25 cents more than today, starting Jan. 1, 2018.
Mayor Kirk Caldwell’s
administration had proposed three fare hikes over two years that would have left them paying $3.25 a ride starting July 1, 2019, but the committee decided Tuesday to advance only one of the three hikes.
Councilman Ikaika Anderson said an upcoming rate commission should be able to determine when future rate increases should be instituted.
Meanwhile, the committee decided to reject the administration’s plan to raise property tax rates for the hotel-resort classification to $13.40 per $1,000 of assessed value, or 50 cents more than their current $12.90 per $1,000.
Anderson proposed lowering the amount to $13.10 per $1,000, and other committee members indicated support for that idea.
But Budget Chairman Joey Manahan told committee members that the Council should eliminate any rate hike for the hotel-resort class altogether, and there were no objections to his proposal.
The administration projected that the increase to $13.40 per $1,000 would have netted city coffers $6.5 million more annually.
Manahan said the budget will still be able to balance as a result of savings and cuts elsewhere, largely from provisional accounts.
Max Sword, a vice president of Outrigger Enterprises, and former Mayor Mufi Hannemann, now chief executive at the Hawaii Lodging and Tourism Association, both warned that despite five straight years of tourism growth, a slowdown in visitors is anticipated to happen soon.
Both also noted that some state lawmakers had proposed using hotel room tax dollars to pay for the city’s $10 billion rail project, and that such a spending plan could still become reality if the Legislature chooses to convene a special session to deal with the troubled transit project.
“We have been under siege,” Hannemann said. The tourism industry collectively provides more jobs than any other sector, he said.
Committee members warned that hotel-resort tax rates could be hiked next year if the Legislature denies any additional help to pay for rail’s shortfall.
The nixing of the rate hike for the hotel-resort class means only those in the Residential A class will be seeing a rate increase next year. Residential A properties are those valued at $1 million or more and do not have a homeowner exemption. The plan calls for Residential A owners to pay $4.50 per $1,000 for the first $1 million, and then $9 per $1,000 on any value above $1 million. Currently, they pay $6 per $1,000 on all of its value. Those in the standard residential class pay $3.50 per $1,000, and no increases are proposed.
Mayoral spokesman Jesse Broder Van Dyke said Caldwell is disappointed that the two increases were rejected. “But (he) understands that the Council has difficult decisions to make and respects the process,” he said.
The full Council is expected to hold a final vote on the 2018 budget plan, including a $2.45 billion operating budget, at its June 7 meeting.
