Honolulu City Council passes $2.6 billion operating budget

The Honolulu City Council on Wednesday passed a $2.6 billion executive operating budget for the fiscal year that begins July 1.

The budget is only about $3.5 million more than the one submitted to the Council by Mayor Kirk Caldwell in March. That was roughly 6.4 percent more than the current year’s proposal.

Caldwell’s original budget package included no increases in property tax rates, but did propose a $5 a month curbside refuse disposal charge. The fee was nixed by the Council’s Budget Committee in April.

The Council version also eliminates $44 million the administration had set aside in the capital improvements project budget to help fund a hole in the city’s $8.1 billion-plus, East Kapolei-to-Ala Moana rail project. Instead, under the plan devised by Council Budget Chairman Trevor Ozawa, the $44 million would be sourced through Bill 22 Opens in a new tab, the Honolulu Authority for Rapid Transportation’s capital improvements projects (CIP) budget.

The amount is part of a projected $214 million hole that HART and city officials say would be left unfunded after the Legislature’s decision last fall to extend the excise tax surcharge by only three years instead of the four years that had been requested. That money is being spread out over 13 years under a recovery plan that is supposed to assure federal transit officials that the city is committed to using operating budget money — which is derived primarily from property taxes — if necessary.

Warring factions within the nine-member Council argued for more than an hour over whether to include in the bill language that states city revenue from the city’s operating budget could be used to pay the debt service for the $44 million. A minority faction insisted the Council should instead approve such language in a separate measure pending before the Council, Bill 42 (2017) Opens in a new tab. In the end, the language was taken out of the HART CIP budget.

The city CIP budget approved by the Council Wednesday is for $1.09 billion, about 15 percent higher than the $875 million CIP budget Caldwell submitted.

The administration had sought $64 million to begin work on an Ala Moana transit plaza to accommodate riders of rail and TheBus on Kona Street, but after several Council members raised concerns that doing so would eliminate a planned affordable housing tower, the Budget Committee slashed the appropriation to $30 million.