The Hawaii County Council will get a crack this week at Mayor Harry Kim’s proposed $491.2 million budget and tax increases that go with it.
The Hawaii County Council will get a crack this week at Mayor Harry Kim’s proposed $491.2 million budget and tax increases that go with it.
The spending plan takes effect July 1 and is 6.1 percent higher than the current budget.
While rising property values are helping to pad coffers, the county also is facing higher expenses, due in part to increased labor costs. On the revenue side, the county will see its share of the state’s hotel tax drop by about $2 million.
Tax rates would increase by 6.5 percent for each property class except affordable rentals to balance the budget, while two new age exemptions are proposed for seniors to ease their burden. The minimum tax would be raised from $100 to $200.
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.
The nine council members will get their chance to introduce amendments during a special meeting at 9 a.m. Thursday in the Hilo council chambers.
As of Monday afternoon, two amendments had been filed seeking to increase the council’s contingency fund from $675,000 back to its current level of $900,000. Those funds are spent through county agencies or nonprofits.
Any increase in spending at this point has to be matched by cuts elsewhere to ensure a balanced budget.
Council members will first hear from their constituents. A public hearing is slated for 5 p.m. today, also in the Hilo council chambers.
Remote testimony also can be provided at the West Hawaii Civic Center, Naalehu state office building, Pahoa council office and old Kohala courthouse.
If adopted, the tax increases would be the third property owners have seen in the past 10 years.
In his budget message, Kim said he is looking to create a new classification for vacation rentals, though impacts of that wouldn’t be seen until fiscal year 2019.
Kim also is seeking to raise the county’s gas tax from 8.8 cents per gallon to 23 cents over three years to fund transportation improvements. Those would be the county’s first increase in its fuel tax since 1988, though they are not factored in the budget.
The administration’s proposed capital budget, a prioritized list of 48 projects, totals $173.9 million. Projects — paid for with debt, grants, loans or special revenue sources — aren’t guaranteed.
Big-ticket items include:
• $47 million for Kealakehe Wastewater treatment plant upgrade.
• $20 million for Puna road connectivity.
• $12.075 million for Alii Drive culvert replacement.
• $10 million for Reeds Bay Beach Park improvements.
The capital budget also includes $2 million for reconstructing Waianuenue Avenue from Kamehameha Avenue to Rainbow Drive. Another $24 million is forecast for that project in the following three fiscal years.
Additionally, Kim is requesting to borrow $20 million to begin closure of the Hilo landfill. The County Council will consider that request today during a Finance Committee meeting.
Council members will have another special budget meeting June 5 in Hilo.
The proposed budget can be viewed at www.hawaiicounty.gov/finance-budget.
West Hawaii Today reporter Nancy Cook Lauer contributed to this report.
Email Tom Callis at tcallis@hawaiitribune-herald.com.