County budget &real property tax
The County of Hawaii budget for fiscal year 2017-2018 was approved with a total budget of $491 million. By County Charter, we must have a balanced budget prior to starting the fiscal year. This was accomplished as was reported in my previous article about the budget discussions. Listening very carefully to the constituency, I had sought cuts in the proposed budget that would minimize the need for increase in real property tax rates. A modest cut was made but still necessitated a real property tax rate increase to attain the balance budget.
As many of you know, right after we finished balancing the budget, County Council went into reviewing the fuel tax rate. The last time the County adjusted the fuel tax was back in 1988 and at that time, the average price of fuel was about half of what it is today. Hawaii County had the lowest fuel tax rate at 8.8 cents per gallon. The highest rate in the state is $.23 per gallon.
In the overview, it is reasonable to expect an increase to our fuel tax as it has been almost 30 years since the last increase, and the fuel tax is used for the maintenance of our roadways systems, as well as mass transit. It was my intention to remove some of the funding from the general fund by real property tax obligations and replace it with a modest increase in the fuel tax. Unfortunately, by the way our budget process was set up we were not able to do that in concert with each other.
Each penny increase in the fuel tax rate generates about $1 million annually for the County. I believed that a modest step up in the fuel tax over time would be appropriate, provided we looked at the total tax burden and did it in concert with each other. With the balanced budget, I felt adding another tax increase via the fuel tax was too much too fast, and I voted against a fuel tax increase for this year. Again, too much tax burden too quickly.
As stated previously, this year’s budget I view as a “bridge” budget. We have a year to review the real property tax structure and put it in concert with our new fuel tax rates. It is the intention of your County Council to do that and we will be working diligently on that process this year.
Total tax burden
It has been stated that the real property tax rates in our Hawaii County are low and we really should not worry about an increase. However, I view things a little differently as my concern is the overall tax burden to our people. I will reference you to a report that though our real property tax rates are relatively low, our total tax burden is the second highest in the nation. This deeply concerns me and is why I do not support a tax increase when only reviewing one portion of the total tax burden. You can find this at https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494/
We all want the same thing, a successful County and community that thrive and afford a high quality of life. County services such as police, fire, highway maintenance, recreation, etc. can only be delivered with the financial resources that are made available. These come in the form of taxes. Striking a balance between our desires and what we can afford will always be the challenge.
New District 9 office location
My office has moved. Starting the week of July 3, we are in our new space in the Parker Square complex located at 65-1279 Kawaihae Road, Suite 109 in Waimea. There have been a few steps getting the Internet and phone lines hooked up, so please bear with us. We look forward to servicing you better out of our new location.
As always, it is a great privilege to serve as your Councilman and I look forward to continuing my work for you.