The Honolulu City Council just passed a $5 billion budget for the upcoming fiscal year, with cuts that some have argued against and could lead to line-item vetoes from the mayor.
In a 6-3 vote, the council on Wednesday passed a nearly $4 billion operating budget that featured stiff disagreements about cuts it proposed and approved.
Much of the debate over the budget revolved around a $2 million cut from the city’s Office of Economic Revitalization from the previous version of the bill, including about $1.4 million in salaries for 20 office staff. The council ended up cutting it all, before putting back just under $1 million for nine staff who would focus on either film, agriculture or small business.
The cuts came despite vehement opposition from Honolulu Mayor Rick Blangiardi, whose original budget allocated funds for 24 OER staff. At Wednesday’s meeting, he defended the work of the office and said he was “befuddled” by the council's decision.
But Council Chair Tommy Waters said OER has received hundreds of millions of dollars without providing results to facilitate the economy.
“Our job is not to simply act as a rubber stamp for the mayor. Honolulu is up against real growing risks — storm damage, aging infrastructure, climate disruption, an ongoing crisis of housing, transportation, and the cost of living for our residents,” Waters said at the meeting. “We need a budget that matches this moment. For years, year after year, actually hundreds of millions of dollars that the council appropriates simply went unspent and lapsed quietly with little public discussion.”
OER was created in 2020 to guide the city’s short-term recovery from the COVID-19 pandemic. It was also given a long-term goal to diversify Oʻahu's economy by expanding industries like sustainable agriculture, regenerative tourism, and entertainment.
But a city audit released in January said OER has received $324 million in private, federal and city funds with little to show for it. It found that the office hasn’t made progress in more than half of the responsibilities it was given when established, and has only just started programs to improve the island’s economy.
Blangiardi pushed back, noting that none of the recommendations the audit made to improve the office included dismantling it.
“The challenge of the day here is not to run from something,” he said to the council. “How do we fix it? How do we make it best? And I would count on you to work with us to help us do that.”
But Blangiardi has indicated he'll take matters into his own hands, saying that will make line-item vetoes to the budget to restore funding for OER.
The mayor wasn't alone in his opposition to the council's cuts. Local leaders in business and agriculture said OER has provided support for farmers and business owners, and that shrinking the office will hurt the island’s economy.
“The City has identified economic revitalization and diversification as core priorities,” said Sherry Menor, president and CEO of the Chamber of Commerce Hawaii, in written testimony. “Reducing (OER’s) capacity at this scale would limit the City's ability to effectively carry out these priorities at a critical time when the state contends with high cost of living, disaster recovery, and outmigration.”
There were other concerns with the budget, too. About $1.8 million in salaries from the Honolulu Police Department’s budget was re-allocated so that HPD can only use that money for recruitment and retention incentives.
Interim Police Chief Rade Vanic called the adjustment a contradiction, saying that, “It directs the department to accomplish more while providing fewer resources to do so.”
The city's Department of Planning and Permitting lost about $350,000 in salaries and expenses, but similarly, about $240,000 was reallocated for recruitment and retention incentives.
The Department of Parks and Recreation was given money for specific projects, but the council took away more than $200,000 in current expenses that officials say perform important department tasks.
The overall cuts were troubling to some of the council members.
Councilmember Tyler Dos Santos-Tam, who voted against the bill and the cuts because they would hinder important city functions.
He also said, “What's most frustrating to me is that we are consistently told that we, as a city government, need to do more with less, and we act as if there's no way to get around the scarcity but to cut funding, to cut positions.”
He urged the council to revisit ideas to generate revenue, such as a tax on empty homes, an idea the council had tabled.
Councilmember Val Okimoto, who chairs the council's Budget Committee, supported the cuts.
“The proposed budget is about delivering services to the people of Oʻahu in an economic environment where revenues are flat and costs are expected to grow exponentially,” she said.
Okimoto added, “This is not about eliminating economic development. We are upholding the integrity of our administrative systems. We are choosing to prioritize programs with proven outcomes and redirecting these resources toward critical needs that our residents feel every day.”
