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Friday, August 16, 2013
Mayor claims $26 million shortfall just days into fiscal year
By Malia Zimmerman @ 4:59 AM :: 6013 Views :: Honolulu County, Taxes

Mayor’s claim $26 million shortfall just days into fiscal year

Honolulu Mayor Kirk Caldwell Honolulu Mayor Kirk Caldwell

by Malia Zimmerman, August 15, 2013, Watchdog.org

When the Hawaiian Humane Society asked the City & County of Honolulu administration  for an $800,000 increase to its $2.3 million budget, the administration told the agency there would be no additional money. The city is facing a $26 million shortfall.

The disclosure came as a big surprise to Honolulu City Council Budget Chair Ann Koabayshi and other council members. The fiscal year started July 1.

“How did it suddenly appear?” Kobayashi asked.

Just weeks before, on June 6, the nine-member council approved the final operating and capital-improvement budget for the fiscal year. Honolulu Mayor Kirk Caldwell let the budget become law just days later without his signature. He never voiced fiscal concerns.

“What shortfall is the mayor talking about?” Kobayashi said, noting the council passed a $2-billion operations and capital improvement budget that balanced. “The mayor could have vetoed the budget if he wanted to, but he didn’t.”

Honolulu City Council Member Ann Kobayashi Honolulu City Council Member Ann Kobayashi

Kobayashi said the mayor had not contacted her to discuss the budget, but she said the budget department recently attributed the shortfall to the council’s refusal to increase gasoline taxes ($15 million), the council’s decision to spend $8 million on grants-in-aid for the community and the council plan to spend another $3 million on “miscellaneous” programs and projects.

“Hawaii already has the highest gas taxes in the nation. We did not pass another increase as the mayor wanted. Get over it. That revenue the mayor wanted was never included in the budget,” Kobayashi said.

City spokesman Jesse Broder Van Dyke said the city would be briefing council members and city departments, but hinted some of the problem also is tied to the council’s refusal to fund the city’s vacant positions and public union raises.

Lowell Kalapa, president of the Tax Foundation of Hawaii, said the administration was not happy with the council’s decision to remove funding totaling about $65 million for vacant positions that have not been filled in years.

The council arranged it so rather than having a slush fund of money from vacant positions, the departments would have to justify the request to the managing director or mayor, who would approve new hires, Kalapa said.

“Is it appropriate to keep on funding the city’s vacant positions when the city is really using the money for other things? That is not a good way to run the city,” Kalapa said. “All the council is asking the mayor to do is justify the vacant position that have been vacant for years.”

Lowell Kalapa, Tax Foundation of Hawaii Lowell Kalapa, Tax Foundation of Hawaii

Kalapa said he doesn’t want to take sides, but understands why the City Council members are bewildered by the mayor’s claim.

“There is a process the City Council, budget department and mayor go through to arrive at the final budget, and if the budget department thought the budget did not balance, they should have told the mayor and he should have vetoed it,” Kalapa said. “Now we are just weeks into the new fiscal year and the mayor is yelling ‘fire!’ That doesn’t work.”

Since the first-term mayor has not contacted her directly, Kobayashi said she hopes to get to the bottom of his concerns at the Aug. 21 City Council budget hearing.

The $400 million likely needed for negotiated pay increases for police and fire departments already has been set aside, Kobayashi said, noting union negotiations could not cause a shortfall at this point.

Police, meanwhile, will be taking over the public nuisance duties, such as responding to dogs barking and rosters crowning, which normally are handled by the Hawaiian Humane Society.

“Why should the police be responding to barking dog complaints. They have to sit there and listen to dogs barking for 20 minutes before they can do anything about it. We need the police in other areas,” Kobayashi said.

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