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Kauai faces budget crunch

May 3, 2014
The Associated Press

LIHUE (AP) - Kauai County councilors are considering tax increases and service cuts to cope with a projected $8.9 million budget shortfall.

County officials had hoped for a larger share of the transient accommodation tax that the state levies on hotel rooms. State lawmakers raised the cap on the counties' portion of those revenues from $93 million to $103 million.

The state's four counties had sought a return to the 44.8 percent share they used to receive. Their haul would have been $165 million in fiscal 2013 under that model.

The Garden Island newspaper reported that Kauai's share of the transient taxes will rise by $1.4 million. The county had hoped for about $8.6 million more than that.

Kauai's budget shortfall owes mostly to collective bargaining raises for county employees approved last year.

"Many alternate scenarios are being considered," Mayor Bernard Carvalho said. "We must meet our obligations and balance our budget, and are trying to do so without further burdening our taxpayers or sacrificing critical services."

Officials contend that the counties bear the brunt of providing services for visitors. In Kauai, an island of about 70,000 residents that receives more than 18,000 visitors daily, that strain is significant.



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