Honolulu Mayor Rick Blangiardi’s administration says its proposed $5.14 billion budget package for fiscal year 2026 will fund more affordable housing projects, deal with the crisis of homelessness and augment core public safety services on Oahu.
Blangiardi said the new budget — which proposes a $3.93 billion operating budget and a $1.21 billion capital improvement program that, if adopted, begins “July 1 — also will cover its costs without raising real property taxes.
The city’s $3.93 billion operating budget proposal represents an increase of almost 8.3% over the adopted $3.63 billion budget for the current fiscal year, the city said.
The proposed $1.21 billion CIP budget for fiscal year 2026 is about 15.2% more than the adopted $1.05 billion CIP budget for the current fiscal year, the city said.
In all, Blangiardi’s proposed budget is a more than 9% increase over the city’s current $4.7 billion budget, which the mayor officially signed and adopted in June.
The Honolulu City Council is expected to review the mayor’s new spending plans in coming weeks.
“I would say this is our fifth budget, (and) this is the best budget we’ve got,” Blangiardi said during a news conference inside Honolulu Hale on Wednesday. “(With) this budget, right now, we’re hitting our stride … and with this “budget, we’re shifting from planning to execution.”
To that end, city officials say spending priorities for fiscal year 2026 include directing $143.8 million to affordable housing and homeless service facilities.
Of that, $100 million will be used for the acquisition of affordable housing mixed-uses development, while $10.4 million will be tapped for the renovation or development of low-income affordable housing units, the city said.
“With regard to serving the homeless our focus is not just getting people off the streets … but to actually work to get them services,” city Department of Budget and Fiscal Services Director Andy Kawano said at the news conference. “So we’re going to appropriate $28 million in operating funding for various homeless” programs.
That’s up $14 million from the current fiscal year, he noted.
Spending on operational costs for the city’s public safety and public health agencies — police, fire, Emergency Medical Services and ocean safety — represents roughly 17% of the proposed operating budget, at $657.2 million, the city said.
“Most of our funding of more than $650 million will go to those four agencies in the city,” Kawano said. “Public safety is important to us and we’re going to continue to fund public safety to ensure that we’re able to provide equipment” to first responders.
Allocated funding for TheBus, TheHandi-Van and Skyline mass transit programs comes in at $476.7 million, which is approximately 12% of the proposed operating budget, the city said.
“We have revenues that we collect in the fare box, but on an overall basis (it’s) not enough to cover our operating costs” for transit, Kawano said. “So we fund it, and our funding is substantial.”
The major resources to fund city programs and activities include $1.77 billion in real property tax revenue; $1.24 billion in estimated unreserved fund balances carryover from FY2025; and $108.2 million in Oahu transient accommodations tax revenue, the city said.
At $976.7 million, which represents 24.8% of the proposed 2026 operating budget, the single-largest category of expenditures is primarily funding for city employee benefits, including health care benefits, retirement benefits, post-employment benefits and salary adjustments, the city said.
Debt service comprises roughly 18% of the operating budget, at $696.8 million, including principal and interest payments of $503 million for general obligation bonds and $193.8 million for sewer revenue bonds, the city said.
The city says its proposed CIP budget of $1.21 billion is allocated across key infrastructure and public service projects. Those include:
>> $533.7 million for refuse and sewer projects mandated by a 2010 federally mandated global consent decree for sanitation functions.
>> $207 million for bikeways, highways, streets, bridges, storm drainage and street lighting dedicated toward public streets.
>> $86.1 million for parks, the Neal S. Blaisdell Center, Honolulu Zoo and golf courses.
>> $86 million for the acquisition of buses and handi-vans, bus stop and Americans with Disabilities Act access improvements, and upgrades to the Middle Street Intermodal Transit Center.
>> $73.3 million for civic center upgrades, transportation electrification, energy conservation projects and enhancements to bus and traffic facilities, public buildings and municipal parking.
Other budget highlights include:
>> $244.2 million to fund major CIP at the Honouliuli and the Sand Island wastewater treatment plants.
>> $76 million for the Salt Lake Boulevard widening project.
>> $74.2 million for the acquisition of new buses and Handi-Van vehicles.
>> $65 million for park improvements across Oahu and the acquisition of preservation and conservation lands.
Meanwhile, the city administration says it cannot predict with certainty potential changes to its federal funding sources, which pay for social service programs, transportation projects like the city’s rail project as well as funding to city departments including law enforcement.
This sentiment comes as the Trump administration moves to downsize the federal workforce as well as freeze federal loans and grants, the latter action continues despite being temporarily blocked by a federal judge’s order in January.
At the meeting, Kawano told news reporters that with regard to the potential loss of federal funding that would directly affect city services and programs “we are well aware of what’s going on.”
“We are monitoring the situation,” he added.
As far as budgeting against federal funding shortfalls, Kawano said the city has set aside $10 million in its operating budget to cover the loss of funds earmarked for key city programs, especially funding meant for personnel costs.
“Keep in mind that we also put away every year anywhere from $5 million to $10 million into our fiscal (stimulus) fund, so if the repercussions of what’s going on in Washington impact the economy, we have the capability to draw on that fund,” Kawano said. “This year, our budget is going to put in close to $10 million … as an additional contribution. Currently, we have about $190 million in that fund, and, on a projection basis, we’ll have close to $200 million by the end of fiscal year 2026.”
To that, Blangiardi said as far as budgeting goes “it’s not a prediction of the future.”
“Candidly, we’re all concerned because of the noise that’s coming out,” the mayor told reporters. “To that end, this is what I’ve told our team: we’re going to wait and find out what we’re really dealing with and then we’ll adapt to that.”
Correction: The current total amount of money in the city’s fiscal stimulus fund is $190 million. An earlier version of this story misquoted city Department of Budget and Fiscal Services Director Andy Kawano as giving a lower amount.
