Budget committee advances HART operating and CIP budgets, bond issuance, legislative budget and property tax rate to public hearing

The Honolulu City Committee on Budget on Tuesday reported out five measures — the Honolulu Authority for Rapid Transportation (HART) operating budget and capital improvement program (CIP), issuance and sale of general obligation bonds, the council's legislative budget, and a proposed real property tax rate for fiscal year 2026 — for second reading and scheduling of public hearings.

The measures were advanced after brief public testimony and without recorded roll-call votes; the chair recommended each measure be "reported out for second reading and scheduling of a public hearing," members registered no objections, and each measure was marked as passed by the committee.

Natalie Iwasa, speaking in her individual capacity, testified on multiple items. On Bill 26, the HART operating budget for the fiscal year beginning July 1, 2025 and ending June 30, 2026, Iwasa said members should monitor an active state measure, SB 934 SD2 HD1, which she said had been amended to add conditions that could be infeasible under the city’s current full funding grant agreement. "I just wanted to alert you to this," she said, adding that the bill "does have a defective date" and that the committee should note the potential need for decisions if the bill goes to conference committee.

On Bill 27, the HART CIP budget, Iwasa said her comments were "the same as what I made for the other bill," and linked the two measures in public testimony.

On Bill 24, the issuance and sale of general obligation bonds, Iwasa warned about recent fluctuations in capital markets that could raise borrowing costs. "The bond market is going up. They're calling it the Trump bump," she said, adding that relying on bonds to fund short-lived assets such as vehicles can increase interest costs for city taxpayers.

On Bill 21, the legislative budget, Iwasa urged greater internal transparency and spending restraint from the council office. She requested that the council provide information on vacant positions when the measure is presented to the full council and noted the bill lists 173 full-time equivalent positions. She also asked the council to consider cutting expense accounts as a goodwill gesture.

On Resolution 25-75, the proposed real property tax rates for fiscal year 2026, Iwasa said she opposed the resolution because it imposes higher tax rates on landlords than on owner-occupants and that those increases would be passed to renters. She said the resolution includes a 15% increase once assessed value exceeds $1 million and asked the council to consider lowering the initial Tier 1 residential rate to narrow the gap created by the homeowner exemption.

Committee members asked no follow-up questions on the items and no other members of the public spoke. Directors for several departments (Director Kahikina; Director Kai Aquino; Director Kwono; Director Quano) were noted as present or asked to testify, though the record shows limited or no substantive departmental remarks in this segment.

Votes at a glance

- Bill 26 — Approving the Honolulu Authority for Rapid Transportation (HART) operating budget for FY 07/01/2025–06/30/2026: Committee recommended reported out for second reading and scheduling of a public hearing; committee recorded no objections and marked the measure passed for reporting out to the full council.

- Bill 27 — HART capital improvement program (CIP) budget: Committee recommended reported out for second reading and scheduling of a public hearing; no objections; passed for reporting out.

- Bill 24 — Issuance and sale of general obligation bonds: Committee recommended reported out for second reading and scheduling of a public hearing; no objections; passed for reporting out.

- Bill 21 — Legislative budget (council office budget): Committee recommended reported out for second reading and scheduling of a public hearing; no objections; passed for reporting out.

- Resolution 25-75 — Real property tax rates for fiscal year 2026: Committee recommended reported out for scheduling of a public hearing and referred back to the committee thereafter; no objections; passed for reporting out.

What happens next

Each measure will move to a second reading and a committee-scheduled public hearing before the full council. Committee members made no formal amendments or motions recorded on the transcript segment; recorded outcomes are procedural approvals to report the measures to the council for further consideration.

The public testimony in this segment was limited to a single testifier who raised concerns about a pending state bill (SB 934 SD2 HD1), potential higher borrowing costs for bonds, the need for transparency on vacant positions in the legislative budget, and distributional effects of the proposed property tax rates on landlords and renters.