Lower oil prices and increased use of rooftop solar panels are hitting the county budget.
Lower oil prices and increased use of rooftop solar panels are hitting the county budget.
And not necessarily in a good way.
An amended budget Mayor Billy Kenoi submitted to the County Council late Thursday calculates $2 million less in the public utility franchise tax, bringing next year’s revenues to $9.1 million. That tax, a 2.5 percent surcharge on gross operating income of electric and gas utilities, is used for road maintenance projects such as filling potholes, repaving and installing traffic signals and streetlights.
The $2 million decrease in that revenue to the highway fund is somewhat offset in the overall budget by a $1.5 million bump in property taxes, thanks to increases in valuations. Increases in state grants and other fees bring the mayor’s amended proposed budget to $462.9 million, which is 5.5 percent higher than this year’s budget.
“I don’t think there will be a big impact on the budget,” said North Kona Councilwoman Karen Eoff, chairwoman of the council’s Finance Committee.
Kenoi’s amended budget, for the fiscal year that starts July 1, will be dissected and further amended by the County Council during a May 18 special session. Council members can increase specific line items in the budget only by creating a corresponding decrease elsewhere to ensure the budget remains balanced.
The budget also adds eight new positions, in addition to the six added in the March 1 budget proposal. The newest crop of positions include two Housing and Community Development specialists, two planners in the Planning Department, three facilities maintenance and service workers in the Department of Parks and Recreation and one account clerk for Mass Transit.
Kenoi’s March 1 budget added one new land use plans checker and five parks caretakers and recreation personnel, to help care for the many new parks under Kenoi’s tenure.
“In our administration’s eighth and final budget, we continue our investment in infrastructure, transportation, public safety, protecting the environment and creating a safer and healthier community,” Kenoi said in his budget message. “It is the result of our administration’s best efforts to balance the needs of our community, address our obligations to our employees and control the size and cost of government.”
The public utility franchise tax has decreased thanks to rate reductions of about 17 percent from Hawaiian Electric Light Co. based on lower oil prices. In addition, solar panels for electricity and hot water are increasing, leaving HELCO and the Gas Co. lower revenues.
About 12 percent of Hawaiian Electric Co.’s residential electric utility customers statewide had rooftop photovoltaic systems as of December 2014, according to the Hawaii State Energy Office. It’s not known how much that figure increased since then, but the experts agree it’s going up.
The county plans to keep up its current level of road maintenance, Public Works Director Warren Lee said Friday. His department will make up the difference by leasing equipment rather than buying and by trimming $300,000 from the $1 million roads in limbo program.
Roads in limbo are government roads shown only on maps, or roads where the state and county disagree on whose responsibility it is to maintain them. The county spent only $700,000 of its $1 million allotment last year, Lee said, so there shouldn’t be a noticeable difference there, either.
“It doesn’t mean there will be more potholes,” Lee said. “The potholes are filled, the roads resurfaced, according to our regular maintenance plan.”
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.