WAILUKU - A Maui County Council committee Monday advanced its version of the county budget that would raise property taxes, reduce overtime in many county departments and offer up less borrowing through bonds than proposed by Mayor Alan Arakawa.
The council's Budget and Finance Committee advanced its $549.9 million proposed budget for fiscal 2012-13 to the full council. The first of two readings on the county budget is scheduled for 10 a.m. on May 24.
"Members, this was a tough budget session," said committee Chairman Joe Pontanilla.
In addition to the usual financial matters, Pontanilla noted that this year the panel had to deal with the Arakawa budget proposal presented in a different format than in the past and that the council had to devote time to respond to the Charter Commission's proposed amendments.
"The 30-day deadline left us with less time to deliberate on the mayor's proposal, conduct our due diligence and arrive at our own version of the budget," he said. "But we persevered."
The committee approved a budget $8.3 million less than Arakawa's draft budget of $558.2 million.
2012-13 proposed property tax rates
|Council Budget and Finance Committee’s Proposed Property Tax Rates for Fiscal 2012-13|
|Class||Current Rate*||Proposed Rate*|
* rates per $1,000 of assessed value
Despite the budget differences, Budget Director Sandy Baz was positive about the process.
"I appreciate the work of the committee," Baz said after the meeting. "We accomplished a lot. We set forth a new direction in performance measurement and accountability."
In the mayor's budget this year, Baz said that there was a lot more information than just numbers. Using the budget as an "enhanced management tool," department heads and employees came up with and outlined department goals and how they were going to meet those goals and monitor outcomes.
Also in the committee's proposed budget, members approved Arakawa's $243,000 appropriation for the Department of Planning's grants and disbursements for small-town planning. In previous years, that money had been earmarked for Wailuku Main Street Association. In the proposed budget, the money would be available to a variety of local community groups for small-town planning projects as outlined in Arakawa's budget.
Planning Department officials in April told committee members that the change would allow the county to safeguard taxpayer funds while Wailuku Main Street was being investigated by the state attorney general's office for alleged violations of Hawaii's nonprofit laws.
After Monday's meeting, Pontanilla said that the committee had trimmed Arakawa's budget in various areas. Funding for nonprofits either remained flat or was decreased with the county still recovering from the recession.
Pontanilla said the committee whittled down Arakawa's budget by reducing overtime by 10 percent in most departments. The largest overtime cuts came from the fire and police departments, which had several hundred thousand dollars of overtime funds eliminated.
While trimming overtime allocations to the two public safety departments, Pontanilla noted that the committee had added three firefighter III positions so that the Fire Department could staff its Lahaina water tanker truck.
Pontanilla said the committee also didn't want to see the county borrowing as much money through bonds as requested by Arakawa. It shrank borrowing from $35 million in the Arakawa budget to $21.6 million. He said the committee nixed some small capital improvement projects and decided not to fund some equipment purchases.
The administration's proposal for a new sports or convention center complex in Central Maui was not advanced, at least not for now. Money was allocated for repairs to facilities.
The committee made sure that the county continued to put money into unfunded liabilities for county retiree pensions and for the employee health fund, Pontanilla said. "If we don't start to take care of it now," the committee chairman said that the county's general fund was in for a big hit in the future.
To help pay for the unfunded liabilities, the committee is proposing to hike property taxes across the board, with homeowners seeing rates rise from $2.50 to $2.75 per $1,000 of assessed value, or a 10 percent increase.
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 in property taxes. In his proposal, Arakawa wanted to decrease the rate to $2.20 per $1,000 of assessed value for homeowners.
The largest generators of revenue, hotels and resorts, would see their rates go from $9 to $9.15. Under the council's proposed rate, hotels and resorts would generate nearly $67 million. Arakawa had wanted to see the rate jump to $9.20.
Agricultural properties would see a hike from $5.80 to $6 in the committee's budget. Arakawa proposed that that rate remain the same.
The committee also is proposing to increase the minimum tax from $150 to $250. A public hearing on real property tax rates will be held at 11 a.m. May 23 in the Council Chambers. Public testimony will be accepted.
Two new positions will be added to the Department of Finance and two in the Department of Planning - for real property tax assessors and for zone enforcement inspectors to monitor property owners with gentlemen estates on agricultural properties and vacation rentals.
The council has until June 10 to pass a revenue and spending plan for the fiscal year beginning July 1.
* Melissa Tanji can be reached at firstname.lastname@example.org.