WAILUKU - The Maui County Council's Budget and Finance Committee is proposing property tax hikes to cover the county's unfunded pension and health fund obligations and is expected to vote today on whether to advance the council's budget to the full council.
On Sunday, committee Chairman Joe Pontanilla said the council's overall proposed budget for fiscal 2012-13 calls for spending a little more than $549.9 million, which is about 2 percent, or $8.3 million less, than Mayor Alan Arakawa's draft budget of $558.2 million.
Committee members, meeting at 10 a.m. today in Council Chambers, also are poised to recommend approval of property tax hikes across the board, raising revenue that would go in part to pay unfunded liabilities for pensions for county retirees and for the employee health fund.
The amount of property tax rate increases varies, but for homeowners the rate would rise 10 percent from the current $2.50 to $2.75 per $1,000 of assessed value. This fiscal year, the homeowners category is expected to generate nearly $17.4 million. Under the council's proposed rate, homeowners overall would pay nearly $19.2 million.
Pontanilla said the county's unfunded liability for its health fund amounts to $357 million, and the pension fund's unfunded liability is $237 million.
The council has and will continue to set aside money to "whittle it down," he said.
For the upcoming fiscal year, the council is budgeting $22.5 million for the health fund, Pontanilla said. A figure was not immediately available for the amount to be set aside for the pension fund.
Council Member Mike Victorino said that the primary reason for raising property taxes is to cover the unfunded liabilities.
Pontanilla said committee members carefully scrutinized the requests of all departments and "cut back on some of the things requested."
One area of cutbacks was in requests for new vehicles, Victorino said.
The county has more than 700 vehicles, he said, and committee members believe that vehicles unused or underused by some departments should be transferred to other departments for savings. Councilors have asked for a study of county vehicle usage, he added.
Victorino said requests from most nonprofit agencies also were reduced in the proposed budget.
Pontanilla said councilors also are reducing the amount of money borrowed through bonds for county capital improvement projects. The Arakawa administration had requested $35 million in bond money, and councilors are proposing to reduce that amount to $21 million because of concern about the costs of long-term debt, he said.
"We don't want to overburden this county," he said.
Pontanilla said councilors also have decided not to go along with the administration's proposal for a new sports or convention center complex in Central Maui, at least not for now. Money will be put in the budget for repairs to facilities, however.
Councilors also are proposing to budget $100,000 for a master plan for recreational facilities in Central Maui, he said.
Victorino said the administration's sports complex and convention center plans and the idea of privatizing the summer PALS program for children "did not have, in our mind, enough justification and planning."
"We want them to be better organized and prepared," he said. "Then, we can consider some of these changes."
He also said there would be money available for "basic repairs" to the War Memorial Gym and the Coach Soichi Sakamoto Pool.
Pontanilla said $1 million was budgeted in this fiscal year for repairs to the Sakamoto pool, which should be enough for at least interim repairs.
Victorino said councilors also have budgeted for four new positions - two in the Department of Finance and two in the Department of Planning - for real property tax assessors and zone enforcement inspectors to monitor property owners with gentlemen estates on agricultural properties and illegal vacation rentals.
Pontanilla said councilors also are proposing to budget $445,000 to make improvements at Baldwin Beach Park, where there are unsafe conditions after strong surf eroded the coastline and undermined bathrooms at the park. The budget also includes $100,000 for repairs and maintenance at the Wailuku Gym.
The council has until June 10 to pass a revenue and spending plan for the fiscal year beginning July 1.
* Brian Perry can be reached at citydesk@ mauinews.com.
