Honolulu City Council Proposes Cutting Funding for Economic Development Agency

The Office of Economic Revitalization may see major budget and staffing reductions following a critical audit report.

Mar. 31, 2026 at 10:05am

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A minimalist illustration using bold geometric shapes and primary colors to conceptually represent the budget challenges facing Honolulu's economic development agency.Proposed budget cuts threaten to undermine Honolulu's economic development efforts.Honolulu Today

The Honolulu City Council has proposed significant cuts to the budget and staffing of the city's Office of Economic Revitalization (OER), an agency tasked with leading Oahu's economic development. The proposed cuts come after a scathing audit report that found OER lacked transparency and had not implemented many of its economic programs. The Council's Budget Committee has recommended reducing OER's budget by over $1.62 million and eliminating 20 of its 25 positions.

Why it matters

The potential defunding of OER raises concerns about the city's commitment to economic development and recovery, especially as Hawaii's economy continues to struggle. The audit findings also highlight challenges around measuring the impact of economic development initiatives, which could make it difficult to justify funding for such programs.

The details

The Council's proposal to cut OER's funding and staff is part of its review of the city's $5.08 billion budget for the 2027 fiscal year. In the current fiscal year, OER is authorized for 25 full-time positions and has a budget of over $2.2 million. The Budget Committee's proposal would reduce OER's budget by more than $1.62 million and eliminate 20 positions. City officials have expressed opposition to the substantial cuts, arguing that OER's work is critical for supporting businesses and economic recovery, especially in the wake of recent disasters. However, the Council has cited the City Auditor's report, which raised concerns about OER's lack of transparency and delayed implementation of its programs.

  • In January 2026, the Office of the City Auditor issued a report criticizing OER's lack of transparency and program implementation.
  • The Honolulu City Council's Budget Committee proposed the OER budget cuts during a hearing on the city's 2027 fiscal year budget on March 31, 2026.

The players

Honolulu City Council

The legislative body of the City and County of Honolulu, responsible for approving the city's budget and overseeing municipal agencies like the Office of Economic Revitalization.

Office of Economic Revitalization (OER)

A city agency tasked with leading Oahu's economic development, established by the City Council in 2020 and attached to the city's Managing Director's Office.

Office of the City Auditor

The city's independent auditing agency that issued a critical report on OER's lack of transparency and program implementation in January 2026.

Krishna Jayaram

Honolulu's Deputy Managing Director, who expressed opposition to the proposed substantial cuts to OER's budget and staffing.

Amy Asselbaye

The Executive Director of the Office of Economic Revitalization, who acknowledged the agency's deficiencies but argued that its work is critical for supporting businesses and economic recovery in Hawaii.

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What they’re saying

“The reduction associated with (OER) reflects fiscal discipline, district priorities, and departmental performance.”

— Andrew Phomsouvanh, Council spokesperson

“We really feel that recent reports from (the University of Hawaii Economic Research Organization), from the state, not to the mention the floods that have devastated many of our local businesses, many of our farmers, our work across sectors with our state partners, with our city partners, and with private organizations, is critical at this time to help families, businesses and farmers to recover once again.”

— Amy Asselbaye, OER Executive Director

“I'm going to speak frankly to the Council. I think part of the problem we have with the (OER) is that the vast majority of the work that they do manifests itself in intangibles. And those are very difficult to measure, and it's a very difficult thing to provide the Council and the community metrics to say this is what we've done.”

— Mike Formby, Honolulu Managing Director

What’s next

The Honolulu City Council's review of the OER budget, as well as all other city departmental budgets, is expected to continue through June 2026 before a final decision is made.

The takeaway

The proposed cuts to the Office of Economic Revitalization highlight the challenges cities face in justifying funding for economic development initiatives, especially when the impact of such programs can be difficult to measure. The situation in Honolulu underscores the need for greater transparency and accountability in how municipal economic development agencies operate and report their progress.