Honolulu Faces $2.2 Billion Shortfall, Earning a “D” Grade

Honolulu’s financial condition showed some improvement in fiscal year 2023, but the city still faced a $2.2 billion shortfall. This equates to a Taxpayer Burden™ of $17,400, earning Honolulu a “D” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

While revenues outpaced expenses and the city’s unfunded retiree healthcare liability declined due to favorable actuarial adjustments, Honolulu’s financial future remains uncertain. Changes in actuarial assumptions could impact the city’s ability to fully fund promised benefits, affecting long-term infrastructure and essential services planning.
Oahu’s tourism industry continued to recover, with visitor days increasing by 12.9%, arrivals rising 16.6%, and expenditures growing by 3.9%. This economic boost has supported job creation and local businesses. However, despite these positive trends, Honolulu still struggles with significant financial challenges.
Key findings from the report include:

• Honolulu had $3.9 billion available to pay $6.1 billion in bills.
• The city’s financial shortfall amounted to $2.2 billion, leaving each taxpayer with a $17,400 burden.
• While revenues improved, uncertainty over pension and retiree benefit liabilities remains a concern.

Addressing Honolulu’s financial gap will require effective management and strategic planning to ensure long-term fiscal stability and continued support for critical public services.

For those interested in a deeper dive into Honolulu’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.