Honolulu Mayor Kirk Caldwell has put some of Oahu鈥檚 nonprofits on notice.
Don鈥檛 expect a handout from the city.
Caldwell held a press conference Wednesday to criticize the most recent version of the Honolulu City Council budget, calling it fiscally irresponsible and brazenly short-sighted.
In particular, the mayor needled the council over nearly $14 million members have set aside for grants-in-aid that go to nonprofits and other special interests.
While $5.5 million comes from a voter-approved initiative to set aside funds for local charities, about $8.3 million has been inserted by council members through earmarks with little oversight.
Among Caldwell鈥檚 concerns is that taxpayer dollars are going to special interest groups that might not be certified nonprofits or have broad community reach.
Should the council keep that money in its $2 billion spending plan, he said, he might not release the funds.
鈥淒epending on what happens I will be notifying everyone who鈥檚 on this list to not count on this money, that they should not put it in their budget,鈥 Caldwell said.
鈥淚t鈥檚 the most responsible thing to do as mayor. I think the people of the city and county who have paid into this (fund) are going to want to make sure it鈥檚 fully vetted before any money is released.鈥
Caldwell said there鈥檚 been an 鈥渙ut of control鈥 spike in the amount of money the council has earmarked for nonprofits and special interests.
Only $1.6 million is allocated in the current fiscal year for grants-in-aid, although the council budgeted $5.5 million. The council budgeted $2.8 million in Fiscal Year 2012, but the administration only allotted $1.2 million of those funds. In 2011, the budgeted amount is the same as that spent, $1.2 million. Prior to that there was no money for grants-in-aid.
Caldwell used the press conference to put pressure on the council to adopt a budget on June 5 that he can agree with. For the most part, that means cutting out earmarks for special interests.
He said he鈥檚 spoken with city council members about his concerns, and at least two council members 鈥 Breene Harimoto and Ikaika Anderson 鈥 have said they plan to introduce alternative budgets that get rid of the earmarks. Harimoto鈥檚 budget also includes more money for bus services.
Nonprofit earmarks weren鈥檛 the only focus of Caldwell鈥檚 derision. He also attacked the council for pulling nearly $18 million in cash away from purchasing equipment and replacing it with funding from 25-year bonds. That would be the equivalent of buying a new truck with a 25-year home mortgage, he said, because the life of most of the equipment the city wants to purchase is only seven to 12 years.
Caldwell also harped on the council for diverting $10 million that was set aside for pay for future retirement benefits for employees and snipping another $6 million that would have gone into a rainy day fund.
He called these budget balancing measures deeply troubling, and a danger to the city鈥檚 favorable bond rating, which allows it to borrow money at low interest rates.
鈥淭his is about being fiscally prudent by watching every single dollar, by not kicking the can down the road and letting some other person, some other generation worry about it,鈥 Caldwell said.
He described his task as an uphill battle, meaning he might not have the council support he needs to get a budget he prefers passed. It鈥檚 also unclear if he could get the support from enough council members to uphold a veto.
Caldwell and the council have been at odds over his spending plan ever since he released it in March. The main point of contention was a nickel gas tax that the .
That new tax was estimated to raise $15 million in new revenue for the city that would be used to help re-pave streets and restore bus service that was cut by the previous administration. The money also would give the city wiggle room to help deal with union wage increases that are estimated to cost Honolulu an additional $37.5 million in Fiscal Year 2014.
But Councilwoman Ann Kobayashi, who chairs the Budget Committee, said the mayor should have known better than to rely on a new tax to balance his budget. She called it nothing more than 鈥減hantom money,鈥 particularly considering the council鈥檚 previous rejection of a penny gas tax increase.
Kobayashi also said Caldwell鈥檚 critiques are overblown. She said the city has a cushion in the amount of money it carries over from the year to year. According to Caldwell鈥檚 , the city is expecting to see $600 million carry over from Fiscal Year 2013.
The budget chair said she鈥檚 also skeptical the administration will use the full $70 million the council has set aside in the budget to pay to fill vacant positions and fund increased salaries and benefits.
Her main concern, she said, is for the nonprofits that get money from the city and that are seeing some of the federal funds 鈥 such as Community Development Block Grant money 鈥 dry up.
鈥淓verything should be fine,鈥 Kobayashi said. 鈥淭he main thing is we鈥檙e trying to help the residents by not raising taxes and not raising fees as proposed by the administration.鈥
That doesn鈥檛 mean there won鈥檛 need to be tax hikes next year, she acknowledged. Salaries are again scheduled to go up, and unless something changes the administration and council will find themselves in a similar position for Fiscal Year 2015.
The question will be whether they can agree on a solution.
GET IN-DEPTH REPORTING ON HAWAII鈥橲 BIGGEST ISSUES
Support Independent, Unbiased News
Civil Beat is a nonprofit, reader-supported newsroom based in 贬补飞补颈驶颈. When you give, your donation is combined with gifts from thousands of your fellow readers, and together you help power the strongest team of investigative journalists in the state.
About the Author
-
Nick Grube is a reporter for Civil Beat. You can reach him by email at nick@civilbeat.org or follow him on Twitter at . You can also reach him by phone at 808-377-0246.