Honolulu Budget Bills Pass Without Caldwell's Signature

Jun 18, 2020

Most of Honolulu's budget bills for the next fiscal year passed into law without Mayor Kirk Caldwell's signature Wednesday. 

Earlier this year, Caldwell proposed a nearly $3 billion operating and $1.27 billion capital improvement budget for fiscal year 2021. But the COVID-19 pandemic forced the City Council and administration to reconfigure the spending plans.

Two weeks ago, the council passed slightly revised versions of the operating and CIP budgets. 

Bills 19, 21, 27, 28, and 29 will take effect without Caldwell's signature.

Throughout his eight years as mayor, Caldwell says he hasn't signed the city's basic budget bills because of one thing: spending for the rail project.

"[The City Council] put the HART budget, or reference the HART budget, in the other bills," he said.

"And the position of Corporation Counsel, from before I became mayor, they felt that the reason HART was created [was] to take politics out of the decision-making, and not have elected officials influence how money is expended."

Caldwell says the city council disagrees with Corporation Counsel's guidance, and makes references to the Honolulu Authority for Rapid Transportation in his budget proposals. But in doing so, "it creates a technical problem of a legal nature" for him.

But Caldwell added that if the bills didn't have rail-related items, he would've signed them because they have everything his administration needed.

Despite the pandemic, there are budget increases for fiscal year 2021 compared to 2020. 

Budget and Fiscal Services Director Nelson Koyanagi says they decided to maintain as much of the proposed spending as possible.

"We felt that we needed to have the budget available in the event that things are turning around, and the economy starts getting better, we didn't want to be in a situation where we cut our budget so much that the city wouldn't be able to participate in any enhancements to the economy," Koyanagi said.

"Now if things get bad, we can always cut the budget or we can always reduce the amount that we spend. So we felt that having the budget available in case we needed it was a better strategy."

Koyanagi says his department has updated the city's revenue projections because of changing economic impacts of COVID-19. And some cuts were made to several departments, such as Transportation Services.

But he says the city will get a better financial picture in August, when real property taxes are due.

"That'll give us a good idea of whether our city revenues will be impacted going forward. Because if taxpayers start defaulting or falling behind at the tax payment, then we may have to start implementing some restrictions on city agencies."

Caldwell and Koyanagi emphasized they are not looking at furloughing any city employees at this time. But if revenues fall short, Koyanagi says there are other steps the city can take before furloughs.

"The first thing we would look at regarding personnel would be not to hire new people," he said.

Koyanagi says the city has vacant funded positions built into the budget – or vacant job positions that are funded for potential hires. He says the first thing the city would do, if conditions didn't improve, was to not fill those positions, and use the funds for those positions "to pay for other things." 

In the meantime, Koyanagi says he has advised the departments to closely monitor their budgets – starting next month.