WAILUKU - The Maui County Council on Wednesday approved keeping property tax rates at existing levels for the next year.

Council members said they were proud to be on track to passing a county budget that dealt with a funding shortfall with spending cuts, rather than tax increases. But they warned that if the general economic slump continues, tax hikes may be inevitable next year.

"It is my belief that before we raise property taxes, we should look to ourselves to be more efficient," said council Budget Committee Chairman Joe Pontanilla.

Pontanilla was the architect of a spending plan for 2010 that included a hiring freeze, postponed major equipment purchases, and increased borrowing to save cash.

Property tax rates will stay at this year's levels under the measure approved unanimously on Wednesday.

The approved property tax rates are:

* Homeowner: $2 (per $1,000 of the property's assessed value).

* Apartment: $4.55.

* Improved residential: $4.85.

* Unimproved residential: $5.35.

* Commercial: $6.25.

* Industrial: $6.50.

* Agricultural: $4.50.

* Conservation: $4.75.

* Hotel/resort: $8.20.

* Time share: $14.

Even though tax rates will stay the same, property tax collections, the county's largest source of revenue, are expected to drop by double-digits in the coming year. That's because property values are continuing to decline due to the weak housing market, and slowing construction is adding fewer new homes to the tax rolls.

Also Wednesday, the council voted to increase vehicle registration fees by 1 cent per pound for vehicles over 6,500 pounds, and by half a cent for other vehicles. Council members also voted to keep fuel taxes at existing levels.

Council Member Gladys Baisa on Wednesday voted with reservations to approve the property tax rates. She said she felt the county should have implemented a moderate tax increase this year in order to cover important services and prepare for a worse year to come. She said property tax increases should come incrementally, rather than happening all at once when the county is desperate.

"I'd rather raise rates 10 cents than raise them by dollars next year," she said.

Adding 10 cents to all property tax rates would have raised an estimated $4.3 million in additional revenue, she said.

But Council Member Jo Anne Johnson said she felt the council made the right decision.

"I'm very proud of the fact that our membership has been able to hold the line," she said.

* Ilima Loomis can be reached at iloomis@ mauinews.com.