Proposed expansion will require increased taxes
Taxes will rise if Mayor Alan Arakawa’s proposed budget for fiscal year 2015 is approved.
The mayor’s proposal reflects a desire to expand government, build new facilities, develop new programs and hire more personnel. His proposed $622.6 million budget for FY 2015 is $63 million more than the budget approved by the County Council last year.
To pay for that expansion, the mayor has proposed increasing real property tax rates by 6.5 percent. This increase compounds the already higher assessed property values countywide, which are up another 9 percent. That means the average taxpayer will get an even larger real property tax bill when reports indicate most taxpayers have yet to recover from the economic downturn.
Each of the mayor’s proposed increases has long-term impacts. No request for a new facility can, in good conscience, be evaluated based on design and construction costs alone.
Take, for example, the new Kihei police station. With construction completed this past year, proposed FY 2015 expansion costs for janitorial services, repair and maintenance, electricity, sewer and water are nearly $600,000. Once built, facilities must be appropriately staffed, equipped and maintained. The county needs to foot the bill for having the lights turned on.
The mayor is urging Maui Electric not to seek any further rate increases until it is operating under a sustainable energy plan. The same principle should apply to county government.
One creative example that should be seriously considered is the kind of volunteer firefighter program already integrated by Hawaii County and about 87 percent of fire departments nationwide. Such a program can help to relieve the cost of additional personnel, while also providing our firefighters with support.
As a hotel manager, I have had to creatively manage a reduced budget. As others in the private sector have done, we have streamlined operations while maintaining the quality of service expected by visitors. Many of you have probably faced the same constraints in your own finances.
A Smith Travel Research report shows that revenues dropped by 22 percent from 2007 to 2009 across the 30 Maui hotels surveyed. During the same time, taxes on hotels increased by 25 percent.
The same report indicates administrative costs for hotels dropped over 12 percent, while county administrative costs have risen. The Office of the Mayor’s proposed operating cost for FY 2015 is 92 percent higher, with staffing increased by 72 percent, compared to the end of Arakawa’s first term.
The council’s Budget and Finance Committee has been conducting a survey, which can be completed online at www.mauicounty.gov/2015budget. When asked how the council should focus on balancing the budget, most respondents said “reduce county expenditures,” and only a few said “maintain current levels” or “raise taxes and fees.”
I invite you to complete the budget survey.
The committee will continue its review of the FY 2015 budget over the next two weeks. I encourage you to provide input on how revenues should be spent and whether more taxes are warranted.
You can testify in person at the Council Chambers in Wailuku or send an email to firstname.lastname@example.org.
* Mike White holds the County Council seat for the Paia/Haiku/Makawao residency area. He is the chairman of the Budget and Finance Committee. “Chair’s 3 Minutes” is a weekly column to explain the latest news on county legislative matters.