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            Mayor Mufi Hannemann today (Thursday, March 9, 2006) said that he will allow Bill 12 (2006) CD1, FD2 to become law without his signature.

            The bill proposes to annually determine the real property tax rates based on adjusting for the City’s uncontrollable costs. The intent is to ensure that revenues from real property taxes do not outpace what are determined to be government’s uncontrollable costs.

            “The Mayor’s Tax Policy Committee and our staff reviewed the bill,” Hannemann said. “Our feeling is the bill presents a number of technical challenges that preclude me from signing it into law. However, I commend the Council for its efforts to provide the public with a degree of transparency and accountability on the cost of core government operations and services.”

            Hannemann noted that he has proposed a no-frills, core-services budget for fiscal year 2007. That would generate $131 million in additional revenue for the City, but more than half of those additional dollars would go toward “uncontrollable fixed costs” including $40 million for collective bargaining increases that are negotiated or arbitrated statewide; $23 million for debt service, $18 million for higher fuel costs and $14 million for additional electricity expenses.

            Hannemann’s budget would also provide $20 million to build up the City’s fiscal stability reserve. “I still believe that we need to start setting aside more money to build our fiscal reserve for the inevitable occurrence of an economic downturn, natural disaster or other major setback. But the Council is apparently not ready to go along,” he said. “We believe it’s absolutely necessary to build upon a reserve fund that has not been increased since 1999. The state is putting aside an additional  $55 million. Therefore, my recommendation is that the Council work with my administration to set money aside, if only incrementally.”

            Now that the Council has passed Bill 12 and if its members are determined to lower  property tax rates and not set aside the $20 million, Hannemann suggested they limit relief to homeowners and farmers, and refrain from doing it across the board.

            “If the Council sees fit to lower tax rates, then I suggest they lower the rates for homeowners from $3.75 per $1,000 of assessed valuation to $3.59 for the improved residential and apartment classes,” Hannemann said. “In addition, I would recommend that the Council lower the rate for agricultural land from $8.57 to $7.57 because of the damage and losses caused by the recent rains.”

            Hannemann cautioned, “I need to remind the public and the Council that the City faces huge increases in what the bill calls ‘uncontrollable’ costs in the years to come. It’s been my goal to pay our debt and bills, help homeowners in the short and long term and put aside money in the fiscal reserve. I still believe the best way to help homeowners is to create a new classification, as our Neighbor Island counterparts have done.”

            The mayor also signed into law Bill 72 (2005), CD2, FD2, which requires the City to establish an islandwide curbside recycling program. The bill requires that by July 1, 2007, the City must have a program that collects at least two types of waste from among glass containers, newspapers, plastic containers, green waste and food waste.
             “I’m signing this with the clear understanding that the Council is committed to providing the funding necessary to meet the bill’s requirements,” the mayor said.




            Bill Brennan, 527-6928

            Mark Matsunaga, 527-5767

Thursday, March 09, 2006

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