HONOLULU (HawaiiNewsNow) – Honolulu Mayor Rick Blangiardi has proposed a $5 billion operating and capital improvements budget for fiscal year 2027.
It’s about $133.6 million less than the current year as city officials brace for economic uncertainty and flat property tax revenue.
The administration described the lower spending plan as a “fiscally disciplined” approach amid concerns about global instability, potential federal budget cuts and an unpredictable local economy.
“We’re running at full throttle,” Blangiardi said. “This is just being smarter about the reality of the money and how it works in the city.”
Where the cuts are coming from
The proposed budget assumes real property tax collections will remain flat. It relies in part on reducing funding for vacant city positions, trimming nearly $50 million from salaries and benefits tied to unfilled jobs.
“We just don’t know. There are a lot of uncertainties going forward, and people are concerned about it,” said Andy Kawano, director of Budget and Fiscal Services.
City officials said the reduction does not signal a slowdown in hiring, but reflects ongoing challenges in filling positions.
Blangiardi said some jobs have remained vacant for years despite recruitment efforts.
Employee costs remain largest expense
Employee wages and benefits remain the largest operating expense at $886.6 million, or 22.3% of the budget. The city recently reached a four-year labor agreement that adds about $220 million in additional benefits over time.
Debt service accounts for $725.6 million, or 18.3%.
Housing and homelessness funding
Housing and homelessness initiatives remain a priority. The proposal includes $100 million for affordable housing mixed-use development, $26.8 million for low-income housing renovation and development, and more than $30 million for homeless services and related public health programs.
Infrastructure investments
Infrastructure projects include $85.3 million for upgrades at the Honouliuli and Sand Island wastewater treatment plants and $40 million for the Salt Lake Boulevard widening project, along with continued investment in wastewater systems, solid waste facilities and climate adaptation efforts.
Public safety and transportation
Public safety and transportation make up a significant share of spending. The budget allocates $674.1 million for police, fire, Emergency Medical Services and Ocean Safety operations.
Another $490 million would support TheBus, TheHandi-Van and Skyline rail operations, with $34.7 million set aside for new buses and paratransit vehicles.
Revenue sources
Major revenue sources include $1.79 billion in real property taxes, $515 million in sewer service charges and $106.7 million in Oahu Transient Accommodations Tax revenue.
What’s next
The proposal now heads to the Honolulu City Council, where council members will hold hearings in the coming weeks before a final vote.
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Bill 22: Relating to the executive operating budget and program for the fiscal year July 1, 2026 to June 30, 2027.Bill 23: Relating to the executive capital budget and program for the fiscal year July 1, 2026 to June 30, 2027.
The new fiscal year begins July 1.
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