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Council advances budget measures and approves phased $20,000 home-exemption increase; officials flag federal funding risks
Summary
The Honolulu City Council passed second-reading budget measures and approved a plan to raise the residential home-exemption by $20,000 effective three years after 2024. Councilmembers and the city Budget director discussed the revenue impact and concerns about the city's reliance on federal money for some services.
The Honolulu City Council on Tuesday advanced multiple budget measures and approved an amendment to increase the residential home-exemption by $20,000, to take effect three years after 2024 (2027), during second-reading action on the operating and related budget bills.
The change to the home-exemption was framed as part of a multi-pronged approach to ease property-tax burdens for homeowners. Councilmember Kia Aina said the increase would help households and was meant to keep pace with rising property values. "The taxpayers deserve...to keep up with rising costs of land as well as the cost of living," she said.
Why it matters: Council members and the Budget director said the exemption change will reduce tax revenue and must be balanced against overall city finances. Andy Kawano, Director of Budget and Fiscal Services, told the council the $20,000 across-the-board increase in the homeowner exemption would reduce estimated tax revenues by about $10.6 million.
Council members also used budget debate to press administration officials on federal funding risks for departments that rely heavily on federal grants. Councilmember Dos Santos Tam and others pressed for contingency plans and for administrative safeguards should federal money be delayed or cut, noting some departments are more than 70% federally funded.
What the council voted on: The council passed first- and second-reading items for the legislative, operating and capital budgets (listed below), and took separate action to move Bill 17, the real property tax home-exemption amendment (Bill 17, CD1) forward on second reading. Budget chairs said they expect follow-up amendments and additional hearings in Committee of the Whole before final adoption.
Key quotations
"The $20,000 across-the-board exemption will reduce estimated tax revenues by about $10.6 million," Andy Kawano, Director of Budget and Fiscal Services, said during the hearing.
"We are a co-equal branch of government...the mayor submits a budget to us. We make amendments based on things we hear from the community," Councilmember Dos Santos Tam said.
Votes at a glance (selected budget items)
- Bill 21 (legislative budget for fiscal 7/1/2025—6/30/2026): passed first reading (moved and seconded as part of the package). - Bill 22 (executive operating budget for 7/1/2025—6/30/2026): passed first reading; councilmembers discussed service priorities and contingency funds for departments with federal funding exposure. - Bill 23 (executive capital budget): passed first reading. - Bill 25 (real property tax rates for FY 2025—6/30/2026): passed first reading; councilmembers debated classification and impacts on renters. - Bill 17 (amend real property tax home exemption, Bill 17 CD1): passed second reading (motion carried; roll call recorded 9 ayes).
What comes next: Budget chair and councilmembers said they will continue public hearings and committee work through the next budget round, with a planned CD1 hearing and further amendments before final adoption.
