WAILUKU - Maui County Council members officially passed the county's fiscal year 2010 budget Thursday, but not without a chorus of warnings that 2011 will be much more challenging - and exposing a rift between the council and the mayor.
Under the leadership of council Budget and Finance Chairman Joe Pontanilla, members have worked long hours since mid-March to assemble the $563.7 million budget, which takes effect July 1. It was especially grueling this year, members said, since they had to ask nonprofits and county departments to reduce their budget requests by at least 10 percent.
The County Council unanimously voted in favor of the 2010 budget during a special meeting Thursday. The budget measure now awaits final action by Mayor Charmaine Tavares.
Overall, Tavares has supported the council budget, but she took serious issue in comments made Thursday and in a letter to council members dated Tuesday about plans not to restore $2.9 million in annual transient accommodations tax funding. That budget decision will impact 35 unfilled county jobs as well as reduce waste management and many other key services, Tavares warned.
"I think what the council failed to recognize is that I already cut the budget before it got to them," Tavares said in an interview. "It's very disappointing."
Because of the ongoing economic downturn and its unpredictable side effects, Pontanilla defended his decision to delete funding for 17 unfilled positions or provide partial funding for an additional 18 jobs. Instead, he set aside nearly $4.6 million in an emergency fund and self-insurance program.
He did restore $4 million previously removed from the popular road-resurfacing program.
Tavares said the emergency and insurance money could have and should have covered the empty positions as well as funded the Maui Visitors Bureau and two bulldozers. She said the council did set aside $500,000 for one much-needed landfill bulldozer, but that's $200,000 short of what one actually costs.
Council Member Mike Molina said councilors already should be looking ahead.
"I think next year we should come up with a Plan A and a Plan B for the budget, because I don't anticipate that we will have TAT (transient accommodations tax) next year," he said.
The state attempted to capture the county's $17 million share of the tax, better known as the hotel room tax, to help plug its own budget gap. But legislators fell short earlier this month of the total $100 million grab when Neighbor Island lawmakers and Gov. Linda Lingle refused to take tourist-generated revenue. The hotel tax was established in order to help local governments pay for park maintenance, public safety, roads and other items used by tourists and residents alike.
"This budget process has been like no other for me in my seven years on the council," said Budget and Finance Committee Co-chairman Danny Mateo. "Who would have thought that the state would have gone after the TAT?"
Mateo and other members thanked Pontanilla for producing what they called an austere budget that was produced after 22 committee meetings, and based on the framework introduced by Tavares and her staff this spring.
But Mateo also criticized the mayor at Thursday's meeting for what he called a "spend, spend, spend" and "business-as-usual" philosophy.
Tavares expressed dismay over Mateo's comments. She said she was trying to preserve necessary public services, including maintaining normal landfill hours.
Tavares will continue to argue against the removal of $1.6 million from the Environmental Management Department's Solid Waste Division, she said.
"If the positions, operations and equipment are not restored, the county will not be in compliance with state and federal regulations," Tavares said.
However, since the budget passed unanimously, Tavares said she doubted whether vetoing the budget would make any difference because the council easily has the six votes needed to override her veto.
While Council Member Gladys Baisa voted yes with reservations, saying she wanted all the money restored to the Parks and Recreation and Fire departments. She also raised the specter of increasing property taxes next year to deal with more shortfalls.
The County Council managed to balance the budget for fiscal year 2010 with some utility fee increases but no property tax hikes or layoffs. The county also recently discovered it is $4.5 million short in anticipated real property tax revenues, which council members said they covered through the fee increases and budget cuts.
Several nonprofits also were hit especially hard by the total county cuts. Maui Economic Opportunity Inc. didn't receive $3 million it was counting on from the county toward phase one of its $12 million bus transit center.
MEO Executive Director Sandy Baz said agency officials may have to delay starting construction on the Puunene transit center sometime past the new year.
But Mateo said tough choices had to be made to prepare for an uncertain future.
"We are by no ways out of the forest," he said.
* Chris Hamilton can be reached at chamilton @mauinews.com.
