HONOLULU -- Honolulu Mayor Jeremy Harris called his $1.4 billion 2004 budget his toughest ever.

The mayor said the budget he released Sunday is a "gut wrenching" budget that tries to maintain services in the face of cost cutting.

The 12 pounds of paperwork is 6.8 percent less than this year's budget.

The mayor called his budget "lean," cutting $106 million from department requests. The departments will have to get by on $14 million less than the current budget.

One of the mayor's major points was that he would propose no layoffs.

"A reminder again, an important point for employees we're not planning any layoffs," Harris said.

Tax increases are on the way for homeowners as property taxes will be adjusted so that homeowners and pay the same as those who live in apartments and condos. Tax rates would increase by 2.7 percent. Tax rates for condo owners would drop slightly.

The monthly adult bus pass will rise from $27.50 to $30.

The mayor blames the tight budget on the decline in property values that bring in less tax money and increases in the retirement fund and health costs.

"This year to next year we'll see again, another 10 percent increase in health fund costs," Harris said.

The mayor is proposing a change in trash pickup: one pickup a week for refuse and one pickup a week for recycling. Homeowners who want a second trash pickup would have to pay an additional monthly fee.

The mayor praised city workers for accomplishing more with fewer resources.

"These departments are operating with huge vacancies. Yet, that small group of people is expected to provide more service to people and doing with higher quality. They have dug deep and found a way to do it," Harris said.

One City Council member is disappointed the mayor wants to increase taxes without cutting funds to the departments substantially.

"As I understand the mayor is still doing a lot of smoke and mirrors and shell game here, moving sewer fund money revenues, tapping various funds raising taxes. It will be interesting to see itemizations, what he wants to spend money on," Councilman Charles Djou said.

The City Council will begin hearings on the budget this week.

The mayor released the budget Sunday because the City Charter specifies that the budget be released 120 days prior to the end of the fical year.