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WAILUKU - Hot on the heels of the state's budget crisis, Maui County is anticipating a budget shortfall next year of $45 million or more.

That's down about 10 percent from this year's operating budget. Declining property tax assessments are expected to drive the decline, and contract-negotiated increases in medical premiums for employees will add to the gap, said Finance Director Kalbert Young.

And Maui County could lose another $17 million to $20 million if the Legislature tries again next year to take the counties' share of transient accommodations tax revenues - something Council Budget Chairman Joe Pontanilla said he expects.

Mayor Charmaine Tavares said she asked her department heads to prepare operating budgets that are reduced by 8 to 10 percent from the current fiscal year - a hard request, she acknowledged, since the budgets had already been cut from last year.

Tavares said it was too soon to say if she would propose an increase in property tax rates when she submits her budget to the Maui County Council on March 15.

"At this point, we're looking at all the options, depending on how drastic the revenue shortfall actually is," she said.

Tavares said trends indicated the county would face a $50 million budget shortfall, but Young said he was "more comfortable" forecasting a $45 million deficit at this point.

The county won't know total property valuations until next year, but Young said he's now projecting a 10 percent decline.

"We do know the numbers look like they're going down," he said.

If property tax rates stay the same, that would mean a 10 percent decline in collections from the county's largest revenue source, he noted.

Other sources of revenue are also declining, including the fuel tax, he said, and even if the county holds on to the transient accommodations tax, it will likely be a smaller pot of money than last year.

Pontanilla said he was well aware of the tough times facing county finances in 2010.

The county would need to look at all options for closing the gap, he said, from raising taxes and increasing revenue, to looking for more efficiency in government and cutting programs that don't fall under the county's core functions of health and safety.

"I think it's going to be a struggling year," he said.

Tavares said the county's contract with the Hawaii Government Employees Association would allow her to call up to 24 furlough days in 2010-11, but she did not know yet how many of those days she would use, or if she would implement furloughs at all.

She said her administration was also taking a "hard look" at putting off costs like equipment purchases, and was exploring cost-saving ideas such as collaborating with Hawaii's other county governments when purchasing items like new police vehicles.

"We all have the same specifications. If we order it together in one contract, we might get a better per-unit cost," she said. "It can apply to lawn mowers or weed-eaters. We've just got to be a little more creative."

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