After reading the financial mess that the city of Stockton in California is in, it appears that the Maui County Council saw the signs and made the difficult decisions to ensure the financial stability of the county.
The city of Stockton, with an estimated population of 290,000, is faced with bankruptcy because of revenue shortages and the inability to pay for post-2001 excessive spending and generous employee compensations.
Although Maui County cannot be compared to Stockton, there is one common element between them - Stockton has an unfunded liability of $830 million for public employee pensions and health benefits compared to Maui's unfunded liability of $594 million. Stockton depleted its general fund while the Maui County Council decided to raise millions of dollars through tax increases to gradually pay down the liability debt, rather than allow the general fund to take a big hit in the future. In hindsight, the County Council made the right call by adopting spending and borrowing limits and by implementing a method to pay down the county's unfunded liability obligations.
The Hawaii Legislature needs to also pay attention and rectify its multibillion dollar unfunded liability debt to ensure financial stability for the state.
Greg Kauwe
Kihei
