Breaking News
Local News

Mayor proposes nearly $829 million budget

Project funding bumps budget about $6M higher

By Melissa Tanji 5 min read

Purchasing Wailuku Water Co.'s systems, renovating War Memorial Gym and upgrading West Maui wastewater systems are among Mayor Michael Victorino's priorities in his proposed $829 million budget for the upcoming fiscal year.

Victorino formally delivered his version of the budget to the Maui County Council during a virtual presentation on Thursday afternoon. The mayor's budget for fiscal year 2022, which starts July 1, is about $6 million higher than the current approved budget of $822.6 million. His version calls for $669.6 million in operating costs -- down $13.2 million from the current budget -- and $159.3 million in capital improvement projects -- an increase of nearly $20 million.

Although COVID-19 has forced government departments to slash budgets, Victorino said that the increase in project funding is because many were already "in motion" and are extensions of projects that have been ongoing this past year.

He also pointed to aging infrastructure, such as water and sewer lines in Kahului that were installed more than 60 years ago and now declining.

"We need to continue to maintain and upgrade," he said, noting Maui does not want to be like Oahu, which has had major water main breaks that disrupted traffic and communities.

However, the mayor said that "flat is where I'm at" in terms of operating expenses and pointed out that the proposed budget would shave some costs.

"Given the seriousness of the ongoing COVID-19 public health emergency, the proposed budget focuses on maintaining operations without significant operational expansions," Victorino said in a letter Wednesday to council members.

He added, "our departments will be tasked with 'doing more with less' while being creative to accomplish the needs of our community."

Victorino wrote that he and his administration "have taken a conservative approach" to the proposed budget, noting that there continue to be "many uncertainties" as the county enters the post-pandemic economic recovery phase.

Even with the latest round of federal funds from the American Rescue Plan Act, government budgets will still be stretched.

Maui County expects to receive about $32 million, but "the details and logistics are still unclear and forthcoming."

Victorino's budget sets aside $10 million for countywide recovery and relief efforts for COVID-19. It also allocates $3 million to the county's Emergency Fund to ensure the county is ready to respond to any unexpected issues without impacting funding for other services.

The mayor said he did not include transient accommodations taxes -- also known as the hotel room tax -- in his budget, given uncertainty over whether the state, which collects the tax, will distribute it among the counties.

Maui County taxpayers, meanwhile, may see some relief in property taxes with a proposed decrease in minimum real property tax from $400 to $350. The mayor's budget also proposes a decrease in the real property tax rate for owner-occupied residences below $1.5 million of assessed value and a decrease for all tiers of short-term rental classifications.

However, the mayor is seeking "minimal increases for sewer fees" of 3 percent, aimed at addressing the needs of the county wastewater system and continuing its expansion of R-1 recycled water use.

The budget allocates millions for wastewater issues in West Maui, including $13 million for the West Maui Recycled Water System expansion and $10.5 million for the Lahaina Wastewater Reclamation Facility R-1 process expansion, upgrades that could help the county move away from injection wells that environmental advocacy groups sued the county over in 2012. The U.S. Supreme Court ruled against Maui County in April.

Victorino's budget also proposes more funding for housing. In November, voters passed a council-proposed charter amendment that increases the amount of real property tax revenues that go into the Affordable Housing Fund from 2 to 3 percent. The mayor's budget proposes an increase to 4 percent, or nearly $15 million.

Maui County Council Chairwoman Alice Lee said after the budget presentation that she felt that the council will be "supportive of many of the (mayor's) proposals."

"His overall budget is conservative, sort of a maintenance type of budget," Lee said via email.

She predicted the council "will try to be more creative" in leveraging county funds with state, federal and private sources to maximize "every dollar in our county budget." She also suggested having a "cadre of grant writers" to identify and apply for grants to assist the county.

Lee said the council's deliberations and decision-making must also continue to place "the highest priority" on the public's health and safety, and that regardless of the economic effects of COVID-19, the council needs to address infrastructure, including initiating affordable housing for the workforce and the "houseless."

Lee, who holds the Wailuku-Waihee-Waikapu residency seat, added that she is supportive of the Wailuku Water Co. systems acquisition, something she has proposed in the past. She said that the state will purchase the lands around the system to preserve in perpetuity.

The chairwoman urged the public to monitor and participate in the council's deliberations of the budget, which will begin with a Budget, Finance and Economic Development Committee meeting on Monday.

By law, the council has until June 10 to adopt its own version of the budget, otherwise the mayor's budget becomes law. The new fiscal year begins on July 1 and runs through June 30, 2022.

For more information on upcoming meetings, which will be held virtually, visit mauicounty.us/agendas.

* Melissa Tanji can be reached at mtanji@mauinews.com.

Starting at /week.