‘Record-setting’ $1 billion budget proposed by mayor

Council has until June 10 to pass its own version

Mayor Michael Victorino has proposed a "record-setting" Maui County budget of more than $1 billion for next fiscal year, citing good fiscal management by the county and additional revenues as the economy recovers from the COVID-19 pandemic.

"Today, I proposed a record-setting budget for the County of Maui, for the first time exceeding $1 billion dollars," he told a limited audience in the Maui County Council Chamber Thursday afternoon, a change from the virtual budget presentations since the pandemic began.

He said the county is able to make that level of investment "as together we, the people of Maui County, have done it right."

"Even during the hardest times we operated conservatively, managed our money responsibly and took calculated risk when needed," he said.

For fiscal 2023, which begins July 1, Victorino is proposing a $1.045 billion budget, which includes a $794 million operating budget and a capital improvement budget of $251 million.

It's a nearly 24 percent increase over the current fiscal budget of $843.5 million, which includes $683.2 million for operations and a capital program of $160.3 million.

Victorino cited higher real property valuations and revenue from the new county transient accommodations tax surcharge as support for the higher budget. He added that he is also able to propose lower tax rates for owner-occupied homes.

The county also has a high bond rating, giving investors more confidence in Maui County and allowing taxpayers to save in interest costs, Victorino said during his State of the County address last week.

The county estimates its net revenue from real property tax to be $420.4 million, an increase of around 9 percent from fiscal 2022, and it also expects to receive an estimated $60 million in revenue from the county TAT.

The new tax that imposes an additional 3 percent on visitor lodging in Maui County took effect Nov. 1. The county passed a law in October to create the new tax after the state Legislature took away the counties' share of the transient accommodations tax, instead giving each county the option to impose its own surcharge on top of the state's rate.

Among Victorino's larger proposals are $10 million in countywide costs to be set aside again specifically for the recovery and relief efforts from COVID and other "unforeseeable events."

Victorino is also proposing an increase to the affordable housing fund, in which the county would now set aside 7 percent of real property tax revenue for the fund, or $29.4 million. Currently the county is mandated to set aside 3 percent of real property tax revenue for the fund.

He is also proposing $43 million in general obligation bonds for the design and construction of the Halau of 'Oiwi Art, a facility in Wailuku to "foster the art" of hula and other cultural practices, according to information from the mayor's budget message.

Victorino is hoping to have $33.1 million for road improvements, including the design for reconstruction of Lower Main Street, Lahainaluna and South Kihei roads, Makawao Avenue and for the construction of Lower Kula Road and Pukalani Terrace Subdivision roads. The funding would also go toward improvements at the intersection of Kamehameha and Wakea avenues.

Victorino is also seeking a total of 157 expansion positions. His budget message notes how departments have done "more with less" while being creative to accomplish the needs of the community.

By law, the Maui County Council has until June 10 to adopt its own version of the budget, otherwise the mayor's budget takes effect.

The new fiscal year begins on July 1 and runs through June 30, 2023.

In an email Thursday afternoon, Council Vice Chairwoman Keani Rawlins-Fernandez, head of the council's Budget, Finance and Economic Development Committee, said: "I appreciate the mayor's proposal to use the additional funding we received from the new County TAT and higher hotel RPT to improve our aging county infrastructure, invest in our cultural treasures, and protect our environment, while appropriately resourcing our departments to carry out these important objectives for our community. I look forward to discussing the details further during the council's budget session."

Council Chairwoman Alice Lee called the budget "the most expensive" that has ever been proposed.

"This is the first time we have hit a billion dollars. This makes it a very ambitious budget," said said via phone Thursday afternoon.

"We'll have to look at it very closely to make sure this is a budget we can actually implement or is it a budget we can begin to implement and trim it down to something more manageable."

Lee said things that stand in the way of the large budget include the ongoing worker shortage which almost every county department is experiencing.

"So in order for this budget to work, we have to have a full complement of personnel. I'm not sure at this point we would be able to hire that many people and train them that quickly."

The chairwoman also pointed to the large increase in the capital improvement projects budget, which currently is at $160 million for this fiscal year but is proposed at $251 million for fiscal 2023.

But Lee said she commends Victorino for "hitting very important points" in his priorities, which include affordable housing, addressing climate change, social services and infrastructure, which she said are are priorities of the council as well.

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