Honolulu Mayor Rick Blangiardi’s administration Monday formally unveiled its proposed $5.08 billion budget package for the 2027 fiscal year, which begins July 1.
The mayor’s budget — meant to bolster public safety, increase affordable housing, and upgrade public transportation and related infrastructure improvements on Oahu — includes a $3.97 billion executive operating budget to fund city salaries, police and fire services, and street and parks maintenance, among others.
A $1.11 billion capital improvement program budget is also proposed to pay for improvements to public buildings, bridges, storm drainage work and wastewater system upgrades, city officials assert.
Stating its focus is on being fiscally prudent, the city says its newly proposed budget is $133.6 million less than Honolulu’s current total budget of more than $5.2 billion, which the mayor formally signed in June 2025.
“We were really challenged this year to do this budget,” said Blangiardi during a Honolulu Hale news conference Tuesday. “Actually, this budget began even before we finished the (fiscal year 2026) budget, looking at the future.”
Andy Kawano, the city Department of Budget and Fiscal Services director, said the latest city budget is focused on the economic challenges facing Hawaii.
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“We’re in tough times right now,” he added. “Many are feeling the pinch of the high cost of living in Hawaii, specifically on this island.”
Citing the University of Hawaii Economic Research Organization data as well as current events like the U.S.-Israel war with Iran, Kawano noted “there’s still a threat that inflation will return to 6% and 7% in the future, because of what’s going on in the world.”
He also noted city and county rates for property taxes — the city’s main source of revenue — will be “flat.”
“As you know the assessments went out in December, and the assessed values of all classes of land (on Oahu) on average increased only about 1%,” Kawano said. “The mayor has committed to not increase real property tax rates, therefore our real property tax revenues and collections will be flat year over year.
“We’re going to get about 1% up, so we’re going to have to deal with that constraint,” he added. “This means that we’re going to have to live within our means.”
Kawano asserted this comes as the city has to deal with ongoing labor negotiations — new four-year collective bargaining agreements with some of the city’s major employee unions including the firefighters and Ocean Safety officers — that will show increases on average of about $55 million year over year.
“We’re nearly done with the negotiations but … we’re going to have to pay more in salaries and fringe benefits,” he said.
To deal with diminished revenues and increasing costs, Kawano said the city formally reallocated a percentage of budgeted vacant city position dollars and restricted current expenses across the organization.
“As we’ve reported in the past we have in excess of 10,000 positions budgeted for the city’s operations,” he said. “Typically, we have about 8,000 of those positions filled.”
Kawano noted defunding vacant city positions was done across all 26 city departments “that had excess vacancies.”
“We reallocated some of those vacant position dollars to balance the budget,” he added. “We’re not eliminating jobs; we’re taking the budget dollars from positions that are not filled and we’re reallocating those dollars to fund essential city services.”
In terms of staffing shortfall, the Honolulu Police Department — which has an infamously high staffing vacancy rate due in part to officer retirements, resignations or those leaving for similar law enforcement jobs on the mainland — was also discussed at the news conference.
In December, the Council-led HPD Staffing and Retention Task Force released its report that found that as of July 1, 2025, there were 465 vacancies for uniformed officers and 189 civilian openings — and 228 officers eligible for retirement. Eighteen officers retired, 16 resigned, two were fired and four others were discharged, according to that report.
Blangiardi said he believed the reported vacancies at HPD may not be wholly accurate, based on factors like officer overtime work.“I don’t know what the real number is,” the mayor said. “I’ve always wondered about that — what is the real number?”
But the mayor admitted the information he had regarding the actual number of HPD vacancies was not “scientific” or fully researched. “But it could be something less than the stated number,” he said.
Meanwhile, the Honolulu City Council is scheduled to start its months-long deliberations over next year’s budget, holding initial hearings involving the review of city departments from Monday to March 13.
Monday’s meeting is expected to begin at 9 a.m. inside City Council Chambers at 530 S. King St.
HOUSING AND HOMELESS
For fiscal 2027, the Blangiardi administration has prioritized funding to the city’s housing and homelessness programs and projects. Those include:
>> $100 million for affordable housing mixed-use development;
>> $26.8 million for low-income housing renovation and development;
>> More than $30 million for homeless services and related public health initiatives.
UTILITIES
The city has devoted funds to infrastructure and utilities that include:
>> $85.3 million for upgrades at Honouliuli and Sand Island wastewater treatment plants;
>> $40 million for Salt Lake Boulevard widening.
SAFETY
The city aims to commit funding for transportation and public safety programs, which include:
>> $674.1 million for police, fire, EMS and ocean safety operations;
>> $490 million for TheBus, TheHandi-Van and Skyline operations;
>> $34.7 million for new buses and TheHandi-Van vehicles.
The city asserts its largest operating cost categories include $886.6 million in employee benefits and required obligations. Its operating costs also include a debt service of $725.6 million, the city said.
The city’s sources of funding for fiscal 2027 include $1.79 billion in real property taxes, $515 million in sewer service charges and $106.7 million in Oahu Transient Accommodations Tax revenue, the city said.
