HILO — Hawaii County’s budget will break a half-billion dollars for the first time, but what’s not in the preliminary spending plan released Thursday is almost as significant as what’s in it.
Mayor Harry Kim’s $515.7 million draft budget is $24.9 million more than this year’s budget, a 5.1 percent increase. There are no tax increases in the preliminary plan, other than the fuel tax hike previously approved by the County Council.
Kim’s priorities, based on input from constituents, are homelessness, the transit system and parks maintenance. But even those weren’t spared in a budget that had no room for new programs.
In fact, most departments took reductions to what they presented as status quo spending.
“The budget we are sending is balanced, and we cut all the things we could cut,” Kim said.
Council Chairwoman Valerie Poindexter wasn’t pleased with the plan. She said she’s meeting Monday with House leadership to see how the state can help.
“I will be reviewing the budget that was submitted to us with a fine-tooth comb,” Poindexter said. “Are cuts being made in the appropriate areas? How many new hires and contracts were awarded during the last year? I have a call in to HR to get me some data.”
Most of the new spending is outside county control.
Employee salaries and fringe benefits, negotiated largely at the state level, will add $12.7 million. Included in that figure are contributions to the employee pension plan, at $4.4 million, and other post-retirement benefits for $5.9 million. Salaries recently awarded to top officials by the Salary Commission account for about $1.5 million more.
Principal and interest on money previously borrowed will cost $49 million.
Purchase and maintenance of land for preservation, public access and open space, as set in the county charter, will take $6.3 million.
There is no funding in the budget for homeless projects in East and West Hawaii, planned Hele-on bus improvements or fireworks displays. Transfer stations will now be closed on holidays.
Large road projects such as Ane Keohokalole extension to Kaiminani Drive are postponed. The county goal is to repave each mile of road once every 30 years, but the current rate budgeted is once every 69 years.
Council contingency funds are eliminated, saving $675,000. Another $255,000 is cut from tourism promotion and the usual $1.5 million for nonprofit grants is cut back to the legally required $1 million.
On the revenue side, an additional $12.4 million is expected to be picked up in property taxes because of increased valuations and construction activity. Another $8.8 million extra is expected to come from fuel taxes, with about $3.5 million coming from this year’s rate increase.
Grants will bring in an additional $7.7 million, with $3.5 million coming from a federal Housing Choice Voucher Program grant.
After releasing the budget Thursday, Kim was still lobbying for a half-cent local surcharge to the general excise tax, which would bring at least $25 million annually to the budget. A measure to add the new tax remains stalled in the council.
“In order to balance the budget, many items were removed from the budget,” Kim said in his budget message. “The budget is balanced based on estimated revenues, but that does not mean it is a realistic budget. The budget should contain what is needed to help the people of our county and provide necessary services.”
Poindexter didn’t like seeing the GET surcharge as a bargaining chip.
“I am very concerned about the administration asking us to raise the general excise tax immediately after asking us to approve raising property taxes and the gas taxes — then to see such exorbitant raises get awarded is like rubbing salt into a wound,” Poindexter said. “Further tax increases are going to be a real challenge. People in my district are very upset.”
Finance Committee Chairwoman Maile David had a similar reaction.
“Services and funding cuts are drastic,” David said. “However, I look forward to working together with my colleagues in finding solutions to our budget situation without imposing further tax burdens on our citizens.”
The preliminary proposed budget now goes to the County Council, which will hold departmental reviews April 17-19.
The mayor’s final proposed budget will be released by May 5. Once amended and passed by the council, it goes into effect July 1.