×

Council approves $1B budget despite concerns over cost

Chairwoman calls it ‘way too high,’ vice chairwoman points to tax relief, services

The Maui County building is shown earlier this year. Maui County Council members voted Wednesday to approve a more than $1 billion budget on second reading. While some expressed concerns over the rising costs, others pointed out that the package includes tax relief and services for residents. The Maui News / COLLEEN UECHI photo

The Maui County Council approved a $1.07-billion county budget despite concerns from some members, primarily the council chairwoman, on the budget’s record-setting amount.

“We ended up with a budget that’s way too high,” Chairwoman Alice Lee said during the vote on second and final reading on Wednesday. “I think a good budget is less symbolic and more realistic. And more realistic means, a budget can be implemented. So if we end up with enormous carryover savings, then that means we didn’t get the job done. So hopefully that doesn’t happen. But I have a feeling that is going to happen.”

Council Vice Chairwoman Keani Rawlins-Fernandez, who chairs the Budget, Finance and Economic Development Committee, pointed out that the package includes services and tax relief for residents.

“I know $1 billion sounds like a lot of money, and it is a lot of money. But I think it is important to understand where the money is coming from and what we are trying to communicate,” she said. “What we were able to achieve, like everyone was saying, is that we were able to provide a lot of services to our residents and not just that, to provide tax relief. It’s important that people understand where the money is coming from, so that they don’t look at the $1 billion and think that it’s coming from them only.”

Council members voted 8-0 in favor of the fiscal year 2023 budget, with Council Member Tasha Kama absent and excused during the vote. This was the first time since the pandemic began that seven of nine council members met together for a council meeting in the Kalana O Maui Building in Wailuku.

Lee

The council-approved budget, which takes effect July 1, includes nearly $806 million for operations and almost $264 million for capital improvement projects. It is just slightly higher than the almost $1.05-billion budget proposed by Mayor Michael Victorino in March and is the first time that the county’s budget has exceeded $1 billion.

By law, the council had until Friday to approve its own version of the budget, otherwise the mayor’s proposed budget would have taken effect.

On Wednesday, Victorino thanked the council and Rawlins-Fernandez for their efforts and for working closely with his administration.

“We are emerging from the pandemic with a stronger economy, lower unemployment, and nearly 3,000 approved affordable housing units ready to be built,” Victorino said in an email statement Wednesday afternoon. “During my State of the County address, I committed to expedite construction of workforce housing, diversify and strengthen our economy, and respond to climate change with green infrastructure and environmental protection. This budget provides essential services today, while laying the foundation for a healthy, thriving community for generations to come.”

Victorino has the option to sign the budget, veto it or allow it to become law without his signature.

Rawlins-Fernandez

In a news release Wednesday afternoon, Rawlins-Fernandez explained that the budget is slightly higher than the mayor’s due to increased allocations in the Affordable Housing Fund, housing and homelessness-related programs, agriculture programs, countywide road resurfacing projects and a new $9.5 million allocation for a Maalaea Regional Wastewater System.

Rawlins-Fernandez pointed to the real property tax tiers which allows for different rates to be set for different property valuations and will “provide tax relief to our residents and to those that really need it,” she said. The approved tax rates include cuts for residents who live in their own homes, agricultural, commercial, industrial and apartment categories and a new classification with lower rates for properties with long-term rentals. The budget increases rates for short-term rentals but keeps them the same for hotels and resorts.

Rawlins-Fernandez acknowledged that the more than 80 percent of the county’s property taxes comes from the tourism industry, but noted that the industry was created by “generations before us … so that it can help to make residents’ lives better not worse.”

She also mentioned the county’s new transient accommodations tax — which was imposed after the state took away the counties’ share of TAT statewide — and said that other revenue including federal funds are being used to fund the county budget.

Funding in the budget goes toward items such as affordable housing, capital improvement projects and proposals like the Halau of ‘Oiwi Art, a facility in Wailuku to “foster the art” of hula and other cultural practices and one of the biggest-ticket items in the budget. The fiscal 2023 budget includes $43 million in general obligation bonds for the design and construction of the facility, which was proposed by the mayor and supported by the council.

Despite the global and local economic recovery, Lee felt that council members needed to be cautious given the fiscal challenges on the horizon.

“In the future I think we need to narrow our scope because we are going to have many more challenges in the future, with rising interest rates, the inflation, the serious personnel shortages (and) supply chain issues,” she said. “So all of these challenges will force us hopefully to get together to be more organized and more focused in the future in regard to the budget.”

In spite of her concerns, Lee said that “there are many, many good things in the budget and many areas that will certainly benefit our community, and I look forward to those areas being addressed.”

Council Member Yuki Lei Sugimura acknowledged that at first, she was surprised by the billion-dollar figure.

“I do know when I saw the $1 billion budget I was a little shocked. We do go through it in detail with my staff who are pretty good with budget things and trying to figure out how we could cut back,” she said during the vote. “But I think we are taking a step forward with the growth of our community and the needs of our community, which were reflected in the budget.”

Council Member Mike Molina said he never thought he would ever see a billion-dollar budget, but said that the mayor and all nine council members have their own priorities, so “that’s why the budget is sometimes higher.”

“When I look at this budget, it is reflection of our community and their needs, and we’ve done some good things that for example addresses the housing crisis, adding more money into that fund,” Molina said.

Council Member Kelly King said she agreed with Molina that the budget process was a “bit bumpy” at times but appreciated how members were allowed to give their input on their priorities in the budget, something that was lacking in her first two years on the council.

“I also had heartburn with the billon-dollar price tag when the budget first came out, and I believe that this year, I’m hoping that is because of the fact there is so many federal funding coming out of the federal administration,” King said.

She added that “I have mixed feelings about it but in the end we were able to get our priorities in.”

Council Member Gabe Johnson backed the budget’s approach, saying that “when I take a step back and look at the budget, I think it is bottom-up economics instead of the typical top-down. I mentioned it before, this budget is a moral document. We put our money where our mouth is.”

The new budget includes some fee changes, including the basic residential sewer base charge going from $35 to $37.50 per month on July 1. Condo/multifamily sewer base charges will also go from $35 to $37.50 per month. There are no increases in residential water or trash rates.

At Waiehu Municipal Golf Course, nonresidents will see an increase from $55 to $65 on weekdays and from $67 to $85 on weekends. Residents will see their rates decrease from $16 to $15 on weekdays and from $23 to $20 on weekends.

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

BUDGET HIGHLIGHTS

The Maui County Council passed the final version of its $1.07-billion budget for fiscal year 2023, which starts July 1. Some of the proposed big-ticket projects and new initiatives include:

• $43 million for the Halau of ‘Oiwi Arts.

• $10 million for the Central Maui Landfill Phase III-B expansion.

• $9.5 million for a Maalaea Regional Wastewater System.

• $7.5 million for War Memorial Gym improvements and $7.2 million for football stadium and track rehabilitation.

• $7 million more for workforce housing efforts.

• More than $3 million for traffic safety improvements.

• Doubling the county’s investment in farmers via micro-grants for $3 million.

• Providing a $2.5 million grant to the Hawai’i Community Foundation for initiatives recommended by the county’s Comprehensive Affordable Housing Plan to support homebuyers and renters.

• Conditioning up to $250,000 in the Affordable Housing Fund for the development of a comprehensive plan to end homelessness in Maui County.

• Creating a housing and community development division to support an increase in affordable housing.

• Adding two positions, one to the Office of Council Services and the other to the Department of Management, to support Hawaiian translation of county documents.

• Supporting the creation of an implementation plan for economic diversification under the Office of Economic Development.

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
Are you a paying subscriber to the newspaper?
     

COMMENTS

Starting at $4.62/week.

Subscribe Today