By now I am sure most everyone knows the findings of the budget hearings and the ultimate results. I would like to commend my fellow councilmembers as they worked very hard for many long hours to strike a balance between revenues/taxes and expenditures. The entire process was an exercise of collaboration, cooperation and compromise. Though we did not cut the budget as much as I would have liked and proposed, we were able to cut a small percentage, approximately $675,000. The balances of the actions are reflected in the real property tax rates.
Many of the added expenditures were outside our control. The results of the collective-bargaining units and the wage/benefit packages increased the demands on our county’s budget by over $14 million. The real property taxes were increased to address this shortfall; we as the County Council did find savings in reducing our contingency funds and the Mass Transit budget; specifically a cash flow management decision. We will finance the purchase of a bus rather than paying cash outright.
As to the final of real property tax rates, I believe I can safely say no council member is entirely happy with the outcome. It was the will of the County Council to hold firm on rates for the homeowner. It was also the intent to as minimally as possible impact agriculture and our business sector; industrial, commercial and hotel/resort. Unfortunately on balance, the residential category saw a 10 percent increase.
From my perspective, I view this budget as a “bridge” budget. What I mean by that is, we were faced with the perfect storm with substantial increases of our expenses outside of our control and a reduction of our State TAT appropriations from $19 million to $17 million. As currently written, we will get through this next year, but during that year the intent of the County Council is to do a substantial overhaul on the real property tax rates and get our arms around those who are inappropriately using exemptions; as an example agriculture.
Transient Accommodations Tax Or TAT
As you have seen in the news, this has been a hot topic between the counties and the state. Set in place by the state back in 1986, the intent of the tax was to help fund the impact of tourists on our counties. Initially collecting approximately $65 million, one estimate I have read says the anticipated revenue will approach $500 million. In 1990, the State Legislature allocated 95 percent of the revenues to the counties with 5 percent being retained by the state for administration.
In 1994, the Legislature changed and set the impending Convention Center and tourism marketing to receive approximately 55 percent of TAT, leaving 45 percent for the counties. In the late 2000s, the State Legislature capped the amount of funds coming to the counties at $93 million annually. As I understand, this was supposed to sunset but never did and continues to be problematic. It is the County Council’s goal to continue to work on resolving this discrepancy.
For interested parties, a link to review the summary of TAT can be found at http://www.uhero.hawaii.edu/assets/WP_2016-4.pdf
Kohala banyan trees
As I reported in last month’s update, some trees around and near the old Bank of Hawaii building in Kohala were of concern and being evaluated to possibly be taken down. A report from an arborist confirmed this concern and plans for removal were being drafted. Mother Nature stepped in and dropped a branch this week which has accelerated the process. For safety concerns and assuring our first responders will be able to help the community, these trees identified will be taken down very shortly.
Waikoloa dog park
In 2016, efforts were put forth to establish a dog park in Waikoloa Village on county property. My predecessor, former Council member Margaret Wille had appropriated $6,500 from her contingency relief funds towards this effort. My office has been able to identify and secure these funds in the Department of Parks and Recreation and has worked with them to make certain the project funds did not lapse sending the funds back to the General Fund.
Currently, a Friends of the Park group is being formed that will be responsible for this new facility. The agreements and responsibilities are being drafted towards the advancing of this project. Look for updates as more become available.
It’s a pleasure to work for you for the betterment of our community and I consider it a deep honor to represent each and every one of you.