Property tax cuts in White budget plan
WAILUKU – Maui County Council’s Budget and Finance Committee Chairman Mike White wants to cut current property tax rates by 3.1 percent as well as maintain rates for trash collection fees, reduce county overtime pay and eliminate any new county positions.
White made the announcement Monday morning as he presented his version of the fiscal 2015 county budget. He is proposing a $594 million budget, down $29 million from Mayor Alan Arakawa’s proposed budget of $623 million. Last year the Maui County Council approved a $559.3 budget.
White’s version of the budget calls for a 3.1 percent decrease to all current property tax rate categories. In contrast, Arakawa originally sought an approximate 6.5 percent across-the-board increase that he said in March could be eliminated if the hotel room tax cap was eliminated by the state Legislature. Legislators did not lift the cap of $93 million but instead increased it to $103 million for fiscal years 2015 and 2016. But on Monday, Arakawa said that he didn’t feel the need to increase property taxes and that other solutions could be sought such as delaying some projects and “creative cuts” by the committee. Arakawa had recommended the hikes to help with project funding as well as to keep up with day-to-day services.
White told his committee members that real property tax rates were increased as valuations were low, but since valuations are currently rising, rates should be lowered as well.
“As valuations rise, we must provide relief to taxpayers,” he said while presenting his proposed budget in Council Chambers.
He noted during his presentation that as real property tax revenues and county expenditures have increased 82 percent and 71 percent respectively from 2004 to 2013, the county’s population has grown only 16 percent and the median household income has grown 28 percent for the same period.
“We have been asking for a tax rate increase over the past four budgets, we need to give something back,” White later added after members took a recess to look over his proposed budget.
The committee recessed until 9 a.m. today to allow for the majority of council members to discuss the budget together, as several members were excused from Monday’s meeting.
White told the committee that there were many reasons for reducing the budget, but he said something that is concerning is that Maui County’s economy is not yet “on solid economic footing.”
He put up a chart offering comparisons between 2007 and 2013 economic indicator levels for Maui County that show visitor arrivals down 4.6 percent, civilian employment down 3 percent and private construction permits down 55 percent.
In comparison, he said, Oahu’s visitor arrivals were up 8.6 percent, civilian employment was up 1 percent and private construction permits were up 11 percent, during the same time period.
White said that in addition to helping residents’ pocketbooks, he will keep the residential trash pickup fees flat for all of the county’s islands.
Arakawa had proposed trash fees for those on Maui and Molokai to rise from $108 to $120 per billing cycle for refuse collection billed twice a year. For Lanai, Arakawa had proposed an increase from $9 to $10 per refuse collection unit per month.
Commercial tipping fees under White’s proposal will remain flat. Arakawa had proposed an increase from $65.60 per ton to $71 per ton.
Maui County’s administration has long said that refuse fees have lagged behind the actual costs to the county.
One area that White is not attempting to decrease is most water fees. His proposal will keep the majority of Arakawa’s proposed water rates, which is an approximate 6.5 percent increase for water service fees, which includes bills for water usage.
Keeping most of the proposed increases reflects the lengthy discussions in the council’s Water Committee that focused on raising funds for system upgrades, White’s office said.
Since farmers have been concerned about increasing rates, White is proposing to keep the first two tiers of rates for agricultural users flat while decreasing Arakawa’s proposed hikes in the highest tier.
The first two tiers of rates reflect water usage from 0 to 15,000 gallons per month while the highest tier is for those that use more than 15,000 gallons per month.
White said that in order to compensate for Maui County’s still lagging economy, the county needs to be prepared to find an estimated $100 million in additional revenue to pay for mandated collective bargaining increases through fiscal 2017.
He added that new county employee positions proposed by Arakawa could result in a need for at least $29 million in employment costs over five years.
This is why White said he is proposing to halt any new employee positions and also trimming overtime pay.
But in addition to reducing funding and costs, White is also requesting a “fair” 3 percent increase to most nonprofit organizations receiving grants. The increase is 3 percent over fiscal 2014 appropriations.
He is also requesting an additional $200,000 for the Maui Economic Development Board to focus on business generation and job creation.
White is also proposing that the Department of Fire and Public Safety be allowed more time to settle personnel matters before implementing a change approved by charter amendment that would make the county Ocean Safety Division part of the Department of Fire and Public Safety.
Fire Chief Jeff Murray made the request at a Budget and Finance Committee meeting this month.
At the meeting, Murray said that he needed to work out union and other issues that could take more than a year.
He had said his department did ask the administration to “hold off on this.” Arakawa’s proposed budget reflected the transfer of ocean safety positions to the Fire Department.
Murray noted a section in the Maui County Charter that gives the chief the ability to decide when the transfer would happen.
White’s Monday presentation can be found at www.mauicounty.gov/2015budget.
* Melissa Tanji can be reached at email@example.com.