White proposing cuts to Arakawa’s budget

WAILUKU – Maui County Council Budget and Finance Committee Chairman Mike White is seeking to cut Mayor Alan Arakawa’s proposed county budget for the next fiscal year by $23 million and is proposing to keep all property tax rates at current levels – at least for now.

He is open to increasing some water rates and fees, as proposed by Arakawa.

Several members of the council Monday expressed shock and concern with White’s proposal, which does not add any new jobs some council members say are vital to the county, and includes cuts to equipment, supplies and premium pay proposals.

Some members took issue with White comparing Maui County to other counties in preparing his proposed budget, noting that Maui County is in a better position financially than other counties in the state that have held the line on property tax rates.

White presented his proposed budget Monday to committee members, who this week will work together to come up with a version of the budget for fiscal 2014-15 that begins July 1. The committee has set an internal deadline of Friday and has reserved Saturday, if needed, to finish up its version of the budget. The council has a June 10 deadline to pass a budget or the mayor’s budget will take effect.

The committee will continue its deliberations on the budget beginning at 9 a.m. today in Council Chambers.

White is seeking to decrease Arakawa’s proposed budget from $574 million to $551 million. That would still be $1 million more than the current fiscal year’s $550 million budget approved by the council.

The $1 million increase is to create a County Charter-required county auditor position, White and his staffers said.

Arakawa spokesman Rod Antone did not comment Monday on the specifics of White’s proposal, noting that it is currently a council committee matter.

“It’s really with the council right now. It’s up to the members to decide what they think of Mike’s proposal because they’ve got to vote on it,” Antone said.

After his morning presentation to his committee, White explained that now is not the time to be increasing the tax burden on Maui County residents and businesses.

“The reason for reducing the budget is that we need to look at who is paying the bill,” he said. “I don’t feel it is appropriate at this time when the economy is still not back where it needs to be to add a greater and greater amount of taxation on the businesses that are funding all of the benefits and wages for their employees and supplying all various other businesses in the county with additional purchases and things. So it’s a philosophical position. I don’t feel that it’s appropriate to go back to the same well.

“My hope is that we will see our way clear. If we (council members) feel there are portions of the cuts that need to be returned . . . we (should) ask the homeowners first (for more funds).”

Even if property tax rates remain the same, real property tax revenues will increase $6 million because real property tax assessments have gone up, White explained in a news release. Under Arakawa’s proposal, tax revenues would rise $26 million.

The “extra” $20 million should be kept by property owners for their own expenses, White said.

If councilors feel they need to budget more money, White said they should visit increases in the homeowner rate first. Residents in the homeowner category have carried substantially less of the burden than those in other categories and those in the homeowner category generally use the majority of county services.

Everyone in the county should carry a fair share of the load, White said.

Arakawa’s budget kept rates in the homeowner category the same, noting that the classification saw a “significant increase last fiscal year” with the average homeowner tax bill going up 24 percent. Other categories would see increases ranging from 4.8 percent for the apartment classification to 13 percent for those in the improved residential classification.

When asked if his other job as general manager of Ka’anapali Beach Hotel had influenced his view on the homeowner property tax issue, White replied: “Absolutely not.” He added that he is a homeowner who pays property taxes.

The council member from the Makawao-Haiku-Paia residency district is OK with current rates for businesses. Philosophically, he does feel that businesses should pay a higher property tax rate than homeowners.

After committee members were given several hours to look over White’s proposed budget, Council Chairwoman Gladys Baisa said that the proposal was “a mind-boggling document” and was concerned about the “breadth of the changes” and how it might reflect on the county’s financial stability.

She noted that the county pays its bills on time and has a good bond rating.

Baisa said that throughout the council budget process there have been meetings with communities and with county department staff with some participants making their cases for more money. For example, she said it is important for the Information Technology section of the county to receive more funding to get “just up to par.”

White’s proposal calls for eliminating four new proposed information systems analyst positions, cutting at least six new positions in the Fire and Public Safety Department and trimming six new service representative positions for the Department of Finance.

Baisa also questioned moving some projects from cash to bond funding.

“I have a lot of concerns about these proposals,” Baisa added.

Council Member Mike Victorino took issue with White comparing Maui to other counties, saying Maui County hasn’t had to sell its land to raise funds as some counties have.

He also wondered why White did not go ahead and increase the homeowner real property tax rate rather than suggesting it if the committee feels it needs more funds.

“I felt that was very contradictory on your part,” Victorino said, noting that there are others besides homeowners who use county services 24/7.

White told the committee that he did not propose a homeowner rate hike, because he didn’t want to dictate what could be placed back into the budget.

The committee chairman’s proposed budget also seeks to hold tipping fees at the landfill at current rates and to not call for higher rates for planning fees. Arakawa was seeking to increase the solid waste tipping fees at landfills from $61 to $75 per ton. The Planning Department was seeking a new rate structure to help recoup up to 30 percent of the cost of issuing planning permits.

* Melissa Tanji can be reached at mtanji@mauinews.com.