$843.5 million budget passes out of council

Budget awaits mayor’s review; new fiscal year starts July 1

Maui County Council members Friday gave their final approval to an $843.5 million budget for fiscal year 2022, which includes millions for affordable housing and infrastructure work as well as cuts to tourism funding.

The fiscal 2022 budget, which is around $21 million higher than the current budget of $822.6 million, also includes some increases in sewer, permitting and Waiehu Municipal Golf Course fees.

Passed unanimously by the council on Friday, the budget now heads to Mayor Michael Victorino’s desk for review. The new fiscal year starts July 1.

“This budget demonstrates how we hope to move forward as a county, while continuing to address the ongoing impacts of the coronavirus pandemic,” said Keani Rawlins-Fernandez, chairwoman of the council’s Budget, Finance and Economic Development Committee. “We worked diligently together and with the administration to produce a budget that will continue to support the county while prioritizing the needs of our most vulnerable residents.”

In a statement late Friday afternoon, Victorino said: “I thank the Maui County Council for their hard work on the council-adopted budget and I look forward to reviewing it in detail.”

Victorino did not say whether he will issue any vetoes. He has the option to sign it, veto it or allow it to become law without his signature.

The mayor had proposed an $829 million budget with $669.6 million for operations and $159.3 million in capital improvement project funding. The council’s version, by comparison, contains $683.2 million for operations and $160.3 million for CIP funding.

Part of the increase in the council’s budget came from a hike in property tax rates for hotels and visitor accommodations in hopes of raising more revenue for affordable housing. The council’s version of the budget adds $8 million to the Affordable Housing Fund and $1 million to affordable rental housing programs.

“We worked collaboratively to minimize discretionary expenditures, managing tourism, reducing travel-related expenses and deferring nonessential equipment expenditures as well as evaluating and reducing position expenditures,” Rawlins-Fernandez said. “We also focused on addressing pressing community needs by prioritizing appropriations in affordable housing, social services, environmental protection, increased government accessibility, small business support and agriculture.”

Although support was unanimous for the budget, Council Member Yuki Lei Sugimura said she shares concerns testifiers had brought forward on raising property taxes, especially for the tourism industry.

She agreed that affordable housing is important, but said that money was put toward the cause “without a plan” and at a time when the council is “waiting for the comprehensive housing plan to come to us.”

Tourism, Sugimura said, is still the county’s “main economic driver,” and “it’s hard because we went from zero visitors during the pandemic to them coming back.”

“I’m sitting in a point of reality, knowing that we need to have jobs for our working families and that a lot of them come from the visitor industry,” Sugimura said

On May 14, council members approved property tax rates for fiscal year 2022. Tax rates per $1,000 of net taxable assessed valuation are as follows:

• Owner-occupied: $2.41 for Tier 1 (up to $800,000); $2.51 for Tier 2 ($800,001 to $1.5 million); $2.71 for Tier 3 (more than $1.5 million).

• Nonowner-occupied, $5.45 for Tier 1 (up to $800,000); $6.05 for Tier 2 ($800,001 to $1.5 million); $8 for Tier 3 (more than $1.5 million).

• Apartment: $5.55.

• Hotel and Resort: $11.75.

• Timeshare: $14.60.

• Short-term rental: $11.11 for Tier 1 (up to $800,000); $11.15 for Tier 2 ($800,001 to $1.5 million); $11.20 for Tier 3 (more than $1.5 million).

• Agricultural: $5.94.

• Conservation: $6.43.

• Commercial: $6.29.

• Industrial: $7.20.

• Commercialized residential: $4.40.

The tax rates overall will net about $7.8 million more in county revenues than the current fiscal year. The county is forecast to raise $383.2 million in fiscal 2022 from real property taxes, its largest source of income.

Council Member Mike Molina called the adjustments to property taxes some of the “tough decisions” the council made regarding visitor accommodations.

“While it certainly has been a blessing — it has brought a lot of revenue into the county — it has also brought in some unintended consequences especially to our residents’ quality of life, impacts to our beach parks and our roads and so forth,” Molina said.

“So we need to generate revenue to pay for these impacts from the visitor industry,” he added.

Molina said these issues have also made the council think about lessening the county’s dependence on tourism and expanding other industries such as health and agriculture.

During its budget review, the council’s budget committee also reduced Victorino’s $1.5 million grant for the Maui Visitors Bureau and instead set aside $500,000 for tourism management grants that would be overseen by the mayor’s Office of Economic Development.

Some previously noted budget highlights include a $651,000 increase to the county’s Emergency Fund, $500,000 for Aloha House expansion and $700,000 for the expansion of the Law Enforcement Assisted Diversion program in Lahaina to help homeless adults.

The council also kept Victorino’s proposal for $15 million for War Memorial Gym improvements in the budget, along with multiple projects to upgrade the West Maui wastewater system and $2 million for the acquisition of the Wailuku Water Co. system.

The final budget was slightly higher than the version that passed on first reading on May 21 after council members amended the budget Friday to add $825,000 in bond funds to acquire new property and begin construction on a new Puko’o Fire Station on Molokai.

The community has long been seeking a new site for the fire station, which is located near the ocean and in a flood zone.

Rawlins-Fernandez, who holds the Molokai residency seat and made the amendment, said the funds had been appropriated before by the council but had since lapsed.

The new budget will also bring along some fee increases, including a raise in sewer monthly base charges for single-family and duplex dwellings served by the county water system from $32.50 to $35 per dwelling. Condominiums and multifamily dwellings served by they county water system will also see the same increase per month, per dwelling, according to council documents.

Most golfers at Waiehu Municipal Golf Course also will see upticks in fees, with rates for residents who hold a resident card going from $15 to $16 on weekdays and from $22 to $23 on weekends and holidays.

Retirees with a resident card will see an increase from $10 to $11 on weekdays and from $14 to $15 on weekends and holidays.

Nonresidents will see an increase from $53 to $55 on weekdays and from $65 to $67 on weekends and holidays.

Non-Maui County residents with a Hawaii driver’s license or Hawaii state identification card will see decreases, with rates going from $35 to $28 on weekdays and from $40 to $35 for weekends and holidays.

Short-term rental home permits will experience a large rate hike, with the application fee for new permits going from $812.50 to $857. If a public hearing is required for the permit, applicants currently pay an additional $687.50; that will increase to $1,877.

Permit renewal application fees will go from $375 to $700, according to council documents.

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


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