Through spending restrictions, cuts, user fee increases and tax hikes, City Council members say they have achieved a balanced budget that trims about $7 million from Mayor Peter Carlisle’s $1.93 billion proposal for the 2012 fiscal year, which begins next month.

The Council has advanced a capital improvement program budget that adds $19.7 million more to the mayor’s $526 million proposal. Members cut back in some areas to add $33 million for repair and maintenance of the city’s aging roadways.

Meanwhile, members also are poised to pass the operating and construction project budgets for the to-be-formed Honolulu Authority for Rapid Transportation, which include provisions giving the Council final approval over the semiautonomous board’s spending.

Carlisle has threatened to veto the bill setting up the agency’s budget, and both sides have said they expect the measure would end up in court.

Friday’s regular monthly meeting marks the deadline by which the Council must approve the budget measures. The meeting was moved up from June 8 to accommodate Councilwoman Tulsi Gabbard, who is expected to be unavailable next week due to obligations with the Hawaii Army National Guard. Rescheduling the meeting avoids the possibility of deadlocked votes.

The budget negotiations reflected a cautious process between a new administration submitting its first budgets to a Council with five new members.

Carlisle announced early on that he wanted to tackle the city’s rising debt service, and submitted what he called a lean budget that would hold the line on long-term debt for CIP spending. Council members have pushed back, most notably on the need to fix the city’s crumbling roads and highways, particularly with the upcoming Asia-Pacific Economic Cooperation conference convening in Honolulu in November.

"My concern is anything that has to do with debt service," Carlisle said Wednesday.

Without the $33 million added for roads, the Council’s CIP budget would have trimmed the mayor’s proposal by about $12 million.

"All the members, I think unanimously, have spoken on the issue of the fact that our roads have long been neglected and it is not something that I think the Council, as a body, can look to continue to defer," said Budget Chairman Ernie Martin. The Council does not want to continue deferring the expense, he said.

One option the Council is not considering is the mayor’s proposal to increase the city fuel tax by a penny per gallon this year, with 2- and 3-cent raises implemented in the next two fiscal years.

The proposal failed to advance and is likely dead for the current budget cycle.

Martin said it was "hard to justify" the increase because the administration could not guarantee that the funds generated would be used exclusively for road repairs.

On the operating budget, the Council was spared having to make crippling cuts when the state Legislature decided to cap the amount of hotel room tax money that goes to counties, rather than take the entire amount. The cap wound up costing the city about $3 million of the $40 million in annual revenues.

The Budget Committee made general cuts in expenses across-the-board for all departments, while also trimming some funded positions that had been unfilled for extended periods.

"If the position was vacant more than two years, then basically they hadn’t made much progress, so there was no real strong argument to retain funding," Martin said.

User fees are likely going up on services, including parking for city employees, public golf course greens fees, sewer rates, the Ho­no­lulu Zoo and rental rates for city facilities.

The Council expects to maintain the mayor’s proposed real property tax rate of $3.50 per $1,000 of property value — an 8-cent increase in the rate for residential property owners who live in their homes, but an 8-cent decrease for owners who don’t.

Also under consideration is a proposal to tighten requirements for receiving a historic home tax exemption and another measure to examine all tax exemptions to determine if they should be continued.