Maui County tax increases are just feeding government growth

Viewpoint

Maui County residents are going to be paying more taxes in the new fiscal year to help pay for $45 million in increased county government spending.

However, the extra spending is not necessarily going to provide those taxpayers with better government service. Instead, local residents will be getting soaked with tax hikes to pay for a government that is growing faster than the private sector.

This is not a recent development. Over the past decade, Maui County government spending has increased from $3,820 per person in 2007 to $5,136 per person in the current budget. The county government has hired 300 more people over the same period, totaling 2,642 employees today, which exceeds the rate of population growth for the Valley Isle.

This year, the Maui County Council voted to raise property taxes by $26 million to pay for some of its extra spending.

Some of the county funds will be spent on normal costs of government such as road maintenance, water repair and affordable housing projects. However, most of the new taxes will pay for government growth in the form of new government buildings, public employee raises and rising debt payments.

Among the most expensive projects in the current budget is a new government building that will cost $25 million. The planned two-story, 60,000-square-foot building in Alexander & Baldwin’s Maui Business Park II will be the new home of the county tax department and other various county agencies that currently rent space.

Although the building may help the county save on rent payments in the long term, it’s not clear that the benefits will reach local families, especially when taxes are being increased to pay for it, and taxes are rarely ever lowered.

Meanwhile, islanders will be coughing up more taxes to pay for public employee pay raises and their rising fringe-benefit costs, as Maui County employees are on track to receive pay raises of between 2 and 4 percent next year, which could cost the county an extra $3.5 million annually.

In addition, county public pension and health care benefits costs will increase by $16 million next year, totaling $70 million for the fringe benefits annually.

The county also likely will have to agree to state demands for more money to help pay off its $23 billion debt for retiree pension and health care benefits. Thus, pension debt will continue to grow each year, eating up more of Maui County’s budget and threatening the viability of the services that Maui residents typically rely on the county to provide.

County leaders very likely will seek to increase county taxes even further to cover past and future government spending while endangering the quality of existing county services. Maui County residents, thus, are digging deeper to pay for the growth of local government but may not be getting the biggest bang for their bucks.

Maui County leaders must practice responsible budgeting to ensure that government works for the people — not the other way around.

Instead of growing government and increasing taxes, the best way Maui County officials could help would be to simply cut their excessive spending, thereby letting local families keep more of their own hard-earned dollars to spend on what matters most to them.

* Joe Kent is vice president of the Grassroot Institute of Hawaii, an independent think tank based in Honolulu.

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