Saturday | July 22, 2017
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Council moves budget forward, reluctantly

Everything was on the table but little was decided Thursday during a marathon County Council meeting on the budget, as local lawmakers took their first good look at a $491 million spending plan that includes expenses largely out of county control.

Council members figuratively held their noses and voted 7-1 to advance the budget, if only to move it forward for what Kohala Councilman Tim Richards predicted would be a “tsunami” of amendments.

Kona Councilman Dru Kanuha voted no and Hilo Councilman Aaron Chung, who had been present for the discussion, was absent for the vote because of a previously scheduled phone conference.

Kanuha made it clear he opposed property tax increases to fund the budget. The budget is based on a 6.5 percent tax increase and doubles the minimum tax from $100 to $200.

“It about seems we are taxing out our people. I’m having a hard time even trying to live in my own district,” said Kanuha, adding it’s difficult for him to justify the increases to his constituents. “If we raise taxes, they’re going to want to know what they get out of it.”

The council plans to finalize the budget next month, beginning with a special meeting June 5. The budget, once passed, goes into effect July 1.

Council members chafed at the tedious budget process, saying the time frame is too short to craft a solid budget while adhering to the state Sunshine Law giving notice on public meetings.

Hilo Councilwoman Sue Lee Loy said she didn’t want to end up with something “Frankensteined together.”

“We’ve got to move it forward. Don’t have to like it, but have to move it forward,” Lee Loy said.

The county expects to collect an additional $36.9 million in property tax revenue in the next fiscal year. Of that, about $16 million is from an uptick in property values, with the rest from tax increases, according to the Finance Department.

Council members varied in their support of a property tax increase, with some pointing to the relatively small impact a tax hike would have on most property owners and others believing any increase is a big concern. Some council members also floated the idea of user fees for parks as a way to raise money to maintain them.

The budget does not include proposed fuel tax hikes, which if passed in a resolution planned for next month, wouldn’t take effect until later in the year. Fuel tax, under the law, can be used only for roads and mass transit. A public hearing is slated for May 31.

“The tax increase of 6.5 percent obviously is not going to be well-received by most people,” said Mayor Harry Kim during a two-hour back-and-forth with the council.

“I do feel on the whole, this is the best we could do, the fairest thing we could do in presenting a balanced budget to you.”

The property tax increase would translate to about $54 more in annual tax to a typical home valued at $143,500 and about $116 a year for a typical home valued at $291,600, said Finance Director Collins Tomei.

Kim said his first option was cutting costs, but there were few areas to be cut. Most of the expenses in the budget are fixed costs, such as raises negotiated on the state level for all the employee bargaining units, the county percentage of retirement benefits, payments on bond debt and the 2 percent open space land fund.

North Kona Councilwoman Karen Eoff said she pored over the budget, looking for places to cut. She said her first thought was cutting funded vacant positions, but she discovered most had already been cut during the recession.

“I really couldn’t find a magic bullet,” Eoff said. “At this point in time, I want to support what’s before us.”

Other council members pointed out that they weren’t there just to cut the budget, but they also wanted to improve services. Testifiers in rural Puna and Ka‘u say there is a dire need for more police protection. Others pointed to problems with bus service.

“It isn’t that we’re just trying to balance the budget but we also have to look at what needs are not being met in our communities,” said Puna Councilwoman Eileen O’Hara, mentioning the need for more police and bus routes in particular.

Lee Loy also wanted to see the bang for the buck.

“We’ve got to go back and tell our constituents we’re going to raise your taxes, but you’re getting the same level of service,” said Lee Loy.

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.

 

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