Committee proposes $842.6M county budget
Proposal is $13M higher than mayor’s, will move to full council
A Maui County Council committee is proposing an $842.6 million budget that would increase the current budget by about $20 million and rely on tax hikes for hotels to fund more affordable housing.
The Budget, Finance and Economic Development Committee finished reviewing Mayor Michael Victorino’s proposal last week and moved forward its own version, which includes at least $9 million more than the mayor budgeted for affordable housing, Committee Chairwoman Keani Rawlins-Fernandez said on Thursday.
She added that the additional revenue came from increasing property taxes for hotels and resorts as well as for short-term rental classifications, and that the burden was not placed on residents. The increases were done “to help mitigate the environmental and socioeconomic impacts of the tourism industry, and to improve the quality of life for our residents,” Rawlins-Fernandez said.
The committee’s version is about $20 million more than the current fiscal year budget of $822.6 million and about $13 million more than Victorino’s proposed $829 million budget. It includes an operational budget of $683.2 million and a capital improvement project budget of $159.4 million, compared to the mayor’s proposed $669.6 million for operations and $159.3 million in CIP funding.
Victorino has said that he kept cost of operations “flat” due to the economic impact of COVID-19 but increased CIP project funding by nearly $20 million over the previous year due to projects already in motion and the need to maintain aging infrastructure.
The full council will have its first reading on the budget on May 21. A second and final reading is scheduled for June 4. By law, the council has until June 10 to adopt its own budget, otherwise the mayor’s budget becomes law. The new fiscal year begins on July 1 and runs through June 30, 2022.
To generate more revenue, the committee is seeking a hike in real property tax rates for hotel and resort properties from the current rate of $10.70 to $11.75 per $1,000 of net taxable assessed valuation.
The committee is also seeking increases for short-term rental classifications — first-tier properties assessed up to $800,000 would see an increase from $11.08 to $11.11, second-tier properties assessed from $800,001 to $1.5 million would see an increase from $11.08 to $11.15 and third-tier properties worth more than $1.5 million would see rates jump from $11.08 to $11.20.
The full council will consider the rates on May 14 following a public hearing at 11 a.m.
The additional revenue would be used to add $8 million to the Affordable Housing Fund and $1 million to affordable rental housing programs, Rawlins-Fernandez said.
Other priorities the committee included in its budget are:
• A $651,000 increase to the county’s Emergency Fund.
• $500,000 for Aloha House expansion.
• $300,000 for mobile voting units.
• $300,000 for invasive species control.
• A one-time, $259,000 grant to Maui Food Hub to scale up operations and expand product availability.
• $182,000 for an archaeologist and GIS mapping equipment.
• $115,000 for the Kaunoa senior meal program.
It also includes $423,000 for Planning Department positions to staff district advisory committees and an increase of $600,000 for six full-time limited-time appointment, or “LTA” positions, for the Department of Motor Vehicles to help mitigate service impacts due to COVID-19.
Another $700,000 would go toward the expansion of the Law Enforcement Assisted Diversion program in Lahaina, according to staff from the Office of Council Services. The program, which helps divert homeless adults from legal encounters and arrest to instead engaging them with social services and housing placement, is already in place in Wailuku and Kahului and will also expand with the funding.
Rawlins-Fernandez said the committee also kept in the budget Victorino’s proposal for $15 million for War Memorial Gym building improvements, along with multiple projects to upgrade the West Maui wastewater system and $2 million for the acquisition of the Wailuku Water Co. system.
A notable deletion by the committee from Victorino’s budget is the removal of his proposed $1.5 million grant for the Maui Visitors Bureau.
The committee decided instead to put aside $500,000 for tourism management grants that will be overseen by the mayor’s Office of Economic Development.
Rawlins-Fernandez said last month that the move sends the message “that we do not want to go back to business as usual, to the overwhelming pre-pandemic numbers (of visitors) and that we need management, not more promotion.”
* Melissa Tanji can be reached at email@example.com.