Honolulu Mayor Rick Blangiardi proposed a budget of just over $4.5 billion for the fiscal year starting in July.
That includes a $3.63 billion operating budget and a $919 million capital improvement program.
A notable difference between this year’s and last year’s budget is the allocation for affordable housing development, which was slashed from more than $200 million to $22 million.
Budget and Fiscal Services Director Andy Kawano said the drop is due to the city carrying over nearly $140 million as it waits for the state Legislature to approve plans to allow more mixed-use properties.
Blangiardi said those projects are essential for affordable housing.
“What we're trying to affect here is a lifestyle issue. This is about social equity. People who are going to live in what we intend to build, they should be able to get off a train or a bus or however they get there and be able to have those amenities available to them,” he said.
“You don't want Safeways only at high end, or Whole Foods or whoever is going to be in there in the retail or even other amenities there. That should be incorporated into how people live their lives, and that's how we want to see it executed.”
Kawano said all the departments had to make sacrifices, although the Honolulu Police Department did see a 6% increase in its budget due to salary raises.
The largest chunk of the capital improvement project budget was taken up by $445 million in wastewater projects. There was also $162.2 million allocated to improvements to bridges, roads, street lighting and other transportation projects.
The city has also reallocated $80 million of federal COVID-19 relief funds from the American Rescue Plan Act for potential hazard pay for city employees who had to work during the pandemic.
American Rescue Plan Act funds need to be obligated by Dec. 31, which means there needs to be a contract in place for the project. The funds will need to be spent by the end of 2026.
“We carved out or pulled back funding for programs and projects that we knew wouldn't get off the ground in time,” Kawano said.
Blangiardi added that hazard pay is an appropriate use of the funding.
“At the end of the day, the money's got to come from somewhere,” Blangiardi said.
The city is still negotiating with unions for the exact amount of hazard pay the city will owe. If the amount turns out to be less than $80 million, the city will then quickly try to reallocate the leftover federal dollars.
The measure will now go to the Honolulu City Council for approval.
