Honolulu cuts budget by $40M; Grassroot says ‘keep going’

Most of the targeted savings would come from the operating budget of the city’s Department of Information Technology

from Grassroot Institute of Hawaii, May 17, 2024

The Honolulu City Council is in the process of debating the fiscal 2025 budget — and so far it looks like its members are making an effort to be fiscally responsible.

The current budget draft, approved in early April, slashed $40 million in spending from the budget Mayor Rick Blangiardi proposed in March.

Earlier in the budget deliberations, Council Chair Tommy Waters had proposed abolishing a significant number of the city’s thousands of vacant job positions, but the amended budget now eliminates just a handful. About half of the budget savings comes from cuts to the Department of Information Technology’s operating budget.

Since the budget is not yet finalized, the Grassroot Institute of Hawaii has been urging the Council to stand firm on its efforts to cut spending.

At its May 13 budget hearing, Grassroot Director of Strategic Campaigns Ted Kefalas testified that, “given the economic stresses of the past few years, Honolulu would be wise to limit spending, reduce the burden on taxpayers and focus on budget practices that will help the city prepare for the future.”

He applauded the savings of $40 million, but noted that the budget would still be going up by 7.3% compared to just 4.8% for inflation.

“Ideally, the city budget should not outpace private sector growth over the same period, and this gets somewhat closer to that goal.”

At the same meeting, the Council discussed — but did not decide on — changes in the property tax rates for vacation rentals and bed-and-breakfast accommodations.

Grassroot weighed in on those bills as well, supporting three amendments that would have provided a tax break compared to the current rate proposals.

The Council has until June 15 to finalize the budget and the tax rates.

Also this week, Grassroot submitted testimonies for consideration by the Hawaii and Maui county councils.

Hawaii County

>> Re: Fiscal Year 2024-2025 Real Property Tax Rates: “Extend property tax rate cuts beyond just housing classes.”

>> Bill 152: “Expand preapproved plans to multifamily home construction.”

Maui County

>> Bill 71: “Ease rules on ag land homes to ease Maui housing crisis.” This bill was recommended for passage by Maui County Council’s Housing and Land Use Committee on Wednesday.

>> Bill 85: “Grassroot supports increasing Maui circuit-breaker tax credit.” This bill was also recommended for passage on Wednesday, by the Maui County Council’s Budget, Finance and Economic Development Committee. It did not include some amendments proposed by Grassroot, but it is still a good bill.