Mayor Blangiardi submits FY2025 budget proposals to Honolulu City Council

News Release from City and County of Honolulu, March 1, 2024

HONOLULU – Honolulu Mayor Rick Blangiardi on Friday submitted to the Honolulu City Council his proposed $3.63 billion Operating and $919 million Capital Improvement Program (CIP) budgets for the 2025 fiscal year. Both budget proposals focus on fiscally responsible spending for City and County of Honolulu priorities and a continued commitment to problem solving using innovative solutions and strong cross-sector collaboration.

Included among the Mayor’s spending priorities this year are significant funding allocations for affordable housing, with an emphasis on the planning and design of iconic transit-oriented communities near rail stations, and more than $650 million in funding for public safety agencies, including millions for improvements to Honolulu’s police, fire, and ambulance facilities.

“I am very proud of and grateful to Andy Kawano, the director of the Department of Budget and Fiscal Services (BFS), and to Carrie Castle, the department’s deputy director, for their tireless work in producing our fiscal year 2025 budget,” said Mayor Rick Blangiardi. “Along with our highly talented and dedicated team at BFS and all of our cabinet directors, the masterful crafting of this year’s budget provides us with clear direction and the resources needed to continue to improve all aspects of our City operations.”

In all, the City’s $3.63 billion operating budget proposal represents an increase of 6.4% over the adopted $3.41 billion budget for the previous fiscal year. The proposed $919 million Capital Improvement Project budget for the 2025 fiscal year is $421.2 million less than the adopted $1.34 billion CIP budget from a year ago.

Major revenue sources are projected to increase slightly compared to FY24, including $1.73 billion in real property tax revenue and $93.9 million in O’ahu Transient Accommodations Tax (OTAT) revenue.

Consistent with virtually all City and County of Honolulu budget proposals, the single-largest category of expenditures in the proposed operating budget, at $844.7 million, is funding for City employee benefits, including non-discretionary costs like healthcare benefits, retirement benefits, and other post-employment benefits (OPEB). Debt service comprises roughly 19% of the operating budget, at $677.6 million, a figure that includes principal and interest payments of $446.6 million for general obligation bonds and $231.0 million for sewer revenue bonds.

Spending on operational costs, including salaries, for the City’s public safety and public health agencies (the Honolulu Police Department, Honolulu Fire Department, and Honolulu Emergency Services Department) represents roughly 17% of the proposed operating budget ($626.7M). Allocated funding for mass transit programs like TheBus, TheHandi-Van, and Skyline comes in at $427.7 million — just under 12% of the proposed operating budget.

The proposed CIP budget is largely comprised of roughly $445 million in wastewater and global consent decree projects, amounting to nearly half of all proposed 2025 fiscal year capital improvement expenditures, as well as $162.2 million for improvements to bridges, roads, street lighting and other transportation related projects.

Other FY2025 budget proposal highlights include:

• $22.8 million in CIP funding for affordable housing development, plus $3 million in funding to begin planning for affordable housing in the Iwilei Kuwili rail station transit-oriented development (TOD) area. The budget proposal also includes $5 million for grants incentivizing the construction of affordable rental housing units in smaller lots.
• $19.5 million for homeless initiatives, including $12.3 million for continuation of the successful Housing First initiative and $3 million for homeless services to provide relocation, triage, medical care, respite, shelter and other wrap-around services at Iwilei Center, which the City acquired in early 2024.
• $54.9 million in CIP funding for the acquisition of new City buses and TheHandi-Van vehicles, plus $50 million dedicated to the rehabilitation of various highways and streets and $10.9 million for the electrification of transportation infrastructure.
• $55.8 million in CIP funding for various park improvements throughout the City, as well as for the acquisition of preservation and conservation lands. Also included in the CIP budget is $6 million in Community Development Block Grant (CDBG) funds to complete “multi-year” park improvements throughout the island for eligible neighborhoods. 

The 2025 fiscal year operating budget also includes $80 million in funding for potential payments to essential City employees who were at risk of exposure to COVID-19 during the height of the pandemic, payments that will be pursuant to collective bargaining agreements and/or determined by settlement and/or arbitration.

The 2025 fiscal year Operating and Capital Improvement Project budget bills are posted at https://hnldoc.ehawaii.gov/hnldoc under “Bills,” and the complete report and executive summary will be posted on the same site under “Communications.”

The budget documents will also be available at the following Google Drive link until they are posted on the City Council website: https://drive.google.com/drive/folders/1gHLal5tdiNhck567ojBtoE4Wr3itx4Fg?usp=sharing

—PAU—

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