In the face of a threatened budget veto by Honolulu Mayor Rick Blangiardi, the City Council on Wednesday approved a $4.96 billion budget package for fiscal year 2027, which begins
July 1.
On a 6-3 vote, the Council adopted a spending plan that reduces funding and staff for the city’s Office of Economic Revitalization, a move that prompted Blangiardi to warn he’d veto the budget if the agency were dissolved.
The Council approved
Bill 22, a $3.193 billion operating budget that funds city services, employee salaries, police and fire operations, parks, road maintenance and other day-to-day government functions.
In a separate vote, the Council unanimously
approved Bill 23, a $1.77 billion Capital Improvement Program budget that will fund infrastructure projects across Oahu, including investments in roads, public facilities, parks and wastewater systems.
The budget bills now head to the mayor, who has 10 days — excluding Saturdays, Sundays and holidays — to potentially issue a veto.
The Council’s decision, according to budget documents, will be funded at $991,000 from OER and restores funding for nine full-time positions. That office, currently funded at about $2.2 million and attached to the city Managing Director’s Office, has been staffed largely by more than 20 contract employees rather than permanent civil service workers.
Created in 2020, OER was tasked with promoting economic development and improving quality of life for residents and businesses across Oahu.
The Council’s approved cuts stem largely from an Office of the City Auditor’s scathing audit released in January, which found OER failed to implement several economic development initiatives and lacked transparency in its budgeting and performance reporting.
Prior to Wednesday’s vote on Bill 22, Blangiardi — who submitted his $5.08 billion budget proposal to the Council in March — appeared before the nine-member body and reiterated his opposition to eliminating OER.
“We all know why I’m here,” the mayor told the Council inside a chamber filled with city officials and members of the public before deliberations began. “And also, I’m befuddled by this, I’ll be really honest with you.”
Blangiardi said he’d reviewed the OER audit, but noted that “for me, as a management principle, audits have always been a guideline.
“There’s no question … in your oversight capacity … challenge us operationally … to do something about that,” the mayor said. “And we’re prepared to do that.”
Still, Blangiardi highlighted what he described as OER’s accomplishments, including distributing federal COVID-19 relief funding to small businesses and low-income residents affected by the pandemic.
“And to have no OER resource, it’s not just going to affect the 20 positions, it’s going to affect the thousands of people in their lives,” the mayor said. “So I don’t understand why.”
Blangiardi said that in less than six years, OER had distributed $405 million into the community.
OER’s funding was one aspect of a broader budget debate over how city resources should be allocated.
At the meeting, Andy Kawano, director of the city Department of Budget and Fiscal Services,
expressed concerns
about funding reductions impacting the Honolulu
Police Department, the Department of Planning and Permitting and many other city agencies.
Kawano noted the city’s proposed $5.08 billion budget submitted in March had “not changed materially” under the Council’s version.
“The numbers are really close,” he said. “What has happened, though, is there has been a shifting around of the mayor’s priorities versus yours, Council members, which is fine.”
However, Kawano said $1.8 million was removed from HPD salary funding while the Council added requirements that were not funded under the budget bill.
“I want to be clear about the practical impact of those changes,” HPD interim Police Chief Rade Vanic told the Council later.
“Reducing salary appropriations while adding new spending requirements creates a contradiction: it directs the department to accomplish more while providing fewer resources to do so.”
Likewise, DPP Director Dawn Takeuchi Apuna said Council-led cuts to her agency totaled about
$2.2 million, affecting development initiatives, including affordable rental housing projects, as well as the department’s core operations.
But Council members, including Chair Tommy Waters, offered a different perspective on the budget.
Regarding DPP specifically, Waters noted that more than $10 million in previously approved funding lapsed during the
2024-25 fiscal year.
“Couldn’t you use
some of that savings to supplement the $2.2 million that is currently being redirected to other priorities?” he asked.
Takeuchi Apuna replied that about half of the
$10 million consisted of affordable rental housing project grants under Bill 7 that had not yet been
distributed.
“And we will continue to use those funds,” she added.
During discussions though, Council member Tyler Dos Santos-Tam objected to the operating budget’s elimination of
positions and funding.
“There has been a lot of drama on this, and I really do believe that a better pathway is possible,” he said. “But here we are today with a budget that’s balanced on the backs
of city employees whose positions will be cut in OER.
“And if we start cutting positions in OER, there’s nothing to stop us from cutting other live bodies in other departments as well,” Dos Santos-Tam added. “We have before us a budget that’s balanced on cuts to HPD, a critical public safety agency.”
Ultimately, Dos Santos-Tam, Matt Weyer and
Augie Tulba voted against Bill 22.
Waters, along with the rest of the Council, supported the revised budget.
“You know, the Council budget is forward-looking, it’s fiscally responsible, it’s transparent and intentional,” Waters said. “It reduces spending below the mayor’s proposal without reducing city services.
“We respect the administration’s work in preparing its initial budget proposal and commend the mayor for presenting a budget that slows the growth of government,” he said. “But the Council has a responsibility to review, question, adjust and improve what was initially presented. Our job is not to simply act as a rubber stamp for the mayor.
Waters also said that for years, “hundreds of millions of dollars that the Council appropriated simply went unspent and lapsed quietly with little public discussion.” He added the Council’s “tightened budget” would reduce “paper vacancies” within city departments
including the more than 460 sworn-officer vacancies at HPD.
In a written statement
issued after the meeting, Waters said “this budget restores and expands support for public safety and justice, including additional prosecutorial capacity and victim and witness services” that includes
10 funded prosecutor
positions.
“It also strengthens emergency preparedness through investments in emergency management staffing, disaster resilience, flood mitigation, stream maintenance and drainage infrastructure,” he said.
