Honolulu Mayor Rick Blangiardi said Monday that he plans to focus this year’s city spending on tackling homelessness, affordable housing and rail with a budget that, according to his office, keeps city tax rates and fees steady. 

The administration proposed increasing the city’s operating budget by 14% to $3.35 billion while reducing the capital improvement budget by 43% to $801.6 million. 

“We own this,” Blangiardi said in Honolulu City Council chambers as budget hearings got underway. “Everything we’ve come to you with … is what we believe in. We think it all works to the betterment of our island of Oahu.” 

Now that last year’s hiring freezes have been lifted, the mayor’s proposal said he plans to prioritize the recruitment and retention of employees.  

The budget for fiscal year 2023, which begins July 1, is the first one compiled entirely by the Blangiardi administration. The mayor said last year’s budget, assembled in part by his predecessor Kirk Caldwell’s team, included “a lot of assumptions that we didn’t quite understand or agree with.” He did not specify what those were. 

The mayor’s proposal was based on a projected increase in real property tax revenue thanks to an approximately 9.3% increase in property valuations. The city is also gaining a revenue stream with a new 3% county transient accommodations tax that was established last year. The city’s TAT is expected to bring in $85.8 million, nearly double the TAT amount the state used to provide to the city, according to the city’s proposal.

Key operating expenditures included $11.5 million in city and state funds for the Housing First program, $1.5 million for the Hale Mauliola Housing Navigation Center at Sand Island and $1 million for the Punawai Rest Stop, which provides showers, laundry and other services to homeless people in Iwilei. 

Blangiardi proposed a 5% budget increase in the Department of Planning and Permitting, where the issuance of permits slowed between fiscal years 2020 to 2021. While DPP had made a goal of decreasing permit approval time by 10%, commercial permit issuance time increased by 7%, and the time for residential permits increased by 3%, according to Blangiardi’s budget book.

The mayor also requested a $38 million increase in city contributions to the Hawaii Employee Retirement System because of the need to fill vacant positions, employee collective bargaining and “spiking” by recent retirees who worked extra overtime to boost their pensions. 

The Corporation Counsel’s office is seeking a 4% budget increase to account for needed salary increases and training opportunities. The Honolulu Ethics Commission, which is administratively attached to the Corporation Counsel, is hoping to secure a 28% increase in its budget to cover the costs of new staffing, retention of outside experts and training.

The Honolulu Police Department has requested a 4% budget increase to cover equipment and technological upgrades.

The mayor’s capital budget proposal included $35 million to rehabilitate highways and streets, including $2 million for the widening of Salt Lake Boulevard and $1 million for roadway improvements on Farrington Highway. 

Regarding the Honolulu rail project, Blangiardi’s budget proposal acknowledged interim operations will not start this fiscal year. The city projected interim operations to start between East Kapolei and Aloha Stadium in mid-August. The annual operating and maintenance cost for the rail in the upcoming fiscal year is $96.5 million. 

In the parks department, the administration proposed $27 million in capital projects including improvements at the Honolulu Zoo, municipal golf courses and the Blaisdell Center. 

During the first budget hearing of the year, council members called for more specific information about the mayor’s plan, especially as it relates to housing and homelessness. Budget Vice Chair Radiant Cordero said the administration has yet to produce a housing policy plan that was promised last year. 

“The complexity of that has really been eye-opening,” Blangiardi said. 

“Our tendency, just so you know, is to understand the problems before we offer solutions, and so we’ve taken our time deliberately, and maybe that’s frustrating to some. But none of us wanted to throw together a plan that we couldn’t deliver on.” 

Budget hearings will continue throughout this week. The mayor will speak more about his vision for the next year at his State of the City address, which is scheduled for March 15, he said.