Paradise lost: Honolulu taxpayers drowning in crystal clear sea of debt

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Honolulu (courtesy of Watchdog.org)
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Honolulu (courtesy of Watchdog.org)

By Malia Zimmerman – HONOLULU — Honolulu is far from the rusty ruins of Detroit, literally and, in things such as aesthetics and unemployment data, figuratively as well.

But the Hawaiian capital shares some of the same dubious traits as the broken Motor City.

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Honolulu, fiscal watchdogs warn, must curb spending, focus on its debt and address critical multi-billion dollar infrastructure problems already overwhelming taxpayers.

Honolulu City Council Budget Chairman Ann Kobayashi is concerned about the mounting bills, and about how Oahu’s aging population will pay them.

As the Honolulu City Council tries to avoid additional increases to already high fuel taxes, Kobayashi said the council is considering several “revenue enhancements.”

The council wants to cover $2 billion in costs for operations, another $15 billion for infrastructure repairs and $5.2 billion for a planned elevated rail project.

The U.S. Environmental Protection Agency in 2009 ordered the county to spend $2 billion to upgrade its Sand Island and Honouliuli Wastewater Treatment plants. The wastewater system needs another $3 billion in upgrades and repairs.

The roads, annually rated among the worst in the nation by the Reason Public Policy Institute and TRIP, require $100 million annually in repairs over the next 10 years.

Panos Prevedorous is a professor of engineering at the University of Hawaii who consults with governments around the world about infrastructure. The problem on Oahu is more complicated than simply repaving roads, Prevedouros said.

“We have problems with signage because we cannot see them at night. Our electrical systems, sidewalks, markings, cameras and sensors all need significant upgrades. And that adds up quickly.”

In addition, Oahu has a number of functionally obsolete bridges, Prevedouros said, some that fall under the city’s jurisdiction.

“The bridges are very narrow and not safe for drivers or pedestrians.”

Oahu has, on average, one water main break a day. To make the necessary repairs, ratepayers will need to invest some $2 billion.

A park restroom facility at the popular Maunalua Bay in Hawaii Kai has been closed since February 2011, waiting for a $350,000 upgrade to its sewer system.

It’s just one example of problems, found in the dozens of parks and recreational facilities across the island, that will cost more than $1 billion to repair.

Besides basic infrastructure, the city plans to build a 20-mile, $5.2 billion elevated rail project, from west Oahu into town. The project, which has already cost taxpayers $1 billion, is on hold — a federal lawsuit that could end the rail project will be heard Aug. 15 in the U.S. Court of Appeals.

Honolulu already spends 19 percent of its operational budget on debt service, Kobayashi said. If the rail project is built, Kobayashi said, that number would exceed 20 percent and even rise as high as 24 percent. “We were at 13 percent in good years,” Kobayashi said.

Adding to the money woes, the city must set aside $200 million for police pay increases and another $30 million for medical costs. The fire department’s new contract negotiations are under way.

Hawaii has a high cost of living, with many residents working two or three jobs just to live here. Koabayashi wants to cut city spending but said some fees could increase.

“I worry about how we will pay for all this,” Kobayashi said. “Many of our residents are elderly on fixed incomes and we already are hearing from them about how difficult it is to pay the water and sewer rate increases.”

The city’s homeless population – around 5,000 on Oahu – rose 4.7 percent this year. In addition, the number of homeless people living on the streets, rather than in shelters, climbed 11 percent, according to the latest Homeless Point-in-Time Count.

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  1. 2. HIGH UNEMPLOYMENT: The local media likes to portray Hawaii’s unemployment rate as “low”, but the fact is, it’s unemployment rate is about average relative to the U.S. Mainland. In fact, many Mainland states have lower unemployment rates than Hawaii. What’s more, most jobs in Hawaii are low-paying (service) jobs, with an average (median) income below that of the U.S Mainland where the cost of living is significantly less. This is precisely why many people in Hawaii are working two and three jobs just to survive.

  2. 3. $18-BILLION IN GENERAL OBLIGATION DEBT INCLUDING $3 BILLION IN UNFUNDED PENSIONS + $10-BILLION IN MEDICAL, DENTAL AND OTHER RETIREMENT BENEFITS: As of May 2013, Hawaii has in excess of $20-BILLION in unfunded pension and other retirement benefit obligations. Enough said.

    4. TOO MANY GOVERNMENT (PUBLIC-SECTOR) WORKERS: There are untold numbers of unionized employees in Hawaii, but Hawaii’s single largest public sector union (HGEA or Hawaii Government Employee Association) has in excess of 130,000 employees in a state with a total population of just 1.4 million. That figure represents 10% of the total population of Hawaii. By comparison, the total (combined) number of city and county workers in Detroit (a city of 700,000) is approximately 43,000 and the total number of state workers throughout the entire state of Michigan (population of 9-MILLION!) is barely 50,000. You do the math!

  3. 5. GOVERNMENT (CITY & STATE) CORRUPTION: Historically speaking, from the Mayor on down through the ranks to the chiefs of police and fire, the City of Detroit’s management has been a rotten through-and-through, and if you’ll read the local papers in Hawaii, you’ll find frequent reports of corruption amongst Hawaii’s many university and government officials including its police department.

    6. POLITICAL (LEGISLATIVE) CORRUPTION: Ditto! From top to bottom, from state legislators to attorneys general to state liquor board commissioners, Hawaii’s political establishment is equally rotten.

  4. 7. FEW OR NON-EXISTENT CITY SERVICES: Excluding law enforcement, what specific “city services” does the average citizen anywhere on earth expect in exchange for the thousands and thousands of dollars they pay in combined excise, state income, and property taxes each year? The answer is fire-fighting, sewer, water and road maintenance – the typical things necessary for life in modern times. Does Hawaii really provide any of these services? Given its immense annual revenue from taxation, does the City and County of Honolulu maintain the sewer and water systems, or the roads? The answer is debatable.

  5. 8. INCREASED CRIME & MINIMAL LAW ENFORCEMENT BUDGET: Does HPD truly enforce the laws on Oahu including proper investigations of crime and regular traffic enforcement? Do they enforce speeding and reckless driving? Do they properly enforce DUI laws as they apply to drugs and alcohol? Do they prosecute run-of-the-mill assaults and race-based crimes in Hawaii? Do they police their own ranks for criminal activity among police officers?

    9. ERODING INFRASTRUCTURE & ABANDONED BUILDINGS: Just take a look around! From Salt Lake to Kalihi, from Moili’ili to Waianae and Waipahu . . . any questions?

    10. DRUG AND ALCOHOL ABUSE: Again, its fairly obvious to anyone with open eyes that these two components play a huge role in Hawaii’s social fabric.

    • It's not so much the police, but the judges. Every week a wanted suspect is placed on the news. More often than not, it is a male, and he has 10, 20, or 30 convictions, never mind how many arrests, so it is the judges that keep letting these criminals return to the streets. Hold these judges accountable! The next time they set a criminal free, tell the judge that he will also go to jail if the offender commits another crime within 365 days of his release. Maybe then they will take their cushy job seriously.

  6. And so, like it or not, Hawaii and its future fate are far closer in nature to Detroit’s than its people will ever care to admit.

  7. It is really hard to be a doctor here in terms of running a business. The people of Hawaii make up for it.
    They are wonderful, easy to communicate with and a pleasure. It is lonely sometimes and I think the government
    is lazy and out of touch and very politically correct. Overall, it is a very positive experience.

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