HILO — A one-quarter-percent surcharge will be added to the general excise tax in Hawaii County starting Jan. 1, following action Friday by the County Council.
After teetering on both the winning and losing side of a 5-4 vote for months, the bill passed 7-2 just one day before the state-imposed deadline. Voting no were Kona Councilman Dru Kanuha and Puna Councilwoman Jen Ruggles.
Almost all the council members were unhappy with the compromise measure.
“I’m going to be voting yes to one of the stupidest bills I ever saw,” said Hilo Councilman Aaron Chung.
But with a $5 million hole in the budget caused by the loss of property taxes from lava-plagued Puna, and big hikes in costs from collective bargaining and other employee-related expenses, the majority of the council felt it had no choice.
The tax is projected to raise $10 million for the fiscal 2018-19 budget year that starts Sunday, and $25 million a year after that, before it expires Dec. 31, 2020.
Coming around to vote yes since the GET failed 4-5 on June 19 were Puna Councilwoman Eileen O’Hara, Hilo Councilwoman Sue Lee Loy and Kohala Councilman Tim Richards.
O’Hara, who had asked for reconsideration of the failing vote in a special council session, supported the GET as a way to diversify county revenues, but balked at the compromise bill because it cut the percentage the state allowed from one-half percent to one-quarter percent and shortened the time it would be in effect from Dec. 31, 2030, to Dec. 31, 2020.
“This could be a much better piece of legislation,” O’Hara said.
O’Hara pushed for a commitment that the bill would be changed to a 2030 expiration date before the year is out. But her colleagues refused to do so, with several questioning whether they were even allowed to make that pledge under the Sunshine Law.
Lee Loy had also previously supported the increase, but had voted against the bill last time because the administration hadn’t provided a detailed accounting of how the new money would be spent. That was provided Friday.
Lee Loy also pushed for the full half-percent with a later expiration date. She said if the council killed the bill on the table, it would have another chance to vote on the full amount in January, although it wouldn’t go into effect until Jan. 1, 2020.
“I never wanted to bring a Band-Aid,” Lee Loy said. “I wanted to bring the cure.”
Richards had consistently pushed for a rebalancing of revenue streams by adding the GET surcharge while reducing property taxes and gas taxes. He bristled that the GET without those decreases raises the $518 million budget to $523 million, even taking into account the estimated $5 million loss in property taxes.
Richards urged the administration not to spend all of the increase, but to put it aside for safekeeping for future emergencies. The bill, he said, is “contorted.”
“We’re here with increased revenue … We’ve increased our expenses to match our revenue streams,” Richards said. “We’re talking about balancing our budget, not expanding it.”
Revenue from the GET can be used only for transportation-related projects such as roads, mass transit and trails. But because about $4 million in mass transit expenses are paid from the general fund, shifting that to the GET fund will free up most of the $5 million to patch the hole in the budget. That will allow current county services to continue.
That’s if property taxes in Puna and elsewhere on the island don’t continue dropping. Because no one knows when and where the lava will stop, the real loss won’t be known for some time.
“I really feel that $5 million is going to be very short,” Mayor Harry Kim told the council. “The county of Hawaii is going through a very difficult time right now. … This county needs your help.”
Kim reminded the council that he can’t spend “one dollar” without council approval.
After spending $4.9 million to cover the budget hole, the county wants to spend another $3.6 million of the GET for buses and equipment, programs such as shared ride and bike share and expanded routes, Deputy Finance Director Nancy Crawford said.
Another $1.5 million of the 2018-19 tax will be used to plan and design Ane Keohokalole Highway phase III. Acquisition of rights of way for that project will account for an additional $1 million in 2019-20.
Also from the $25 million in taxes in 2019-20, $11.5 million will go for mass transit and $700,000 will be spent acquiring rights of way for Oneo Lane.
And, $5.6 million will be spent on preventative maintenance for Kawili Street, Alii Drive, Kinoole Street and Manono Street, while $6.4 million goes for major resurfacing projects on Lanikaula Street, Waianuenue Avenue, Kamehameha Avenue, Kilauea Avenue, Komohana Avenue and Mamalahoa Highway-Kiloa Road.
Kanuha and Ruggles have consistently voted no.
Kanuha has said his district already pays some of the highest taxes on the island, and constituents don’t want to pay more.
Ruggles said her district is the poorest and the “poorest of the poor” will feel the hit the most.
Her statements drew a reaction from Hamakua Councilwoman Valerie Poindexter, the council chairwoman.
“I’m not willing to cut the services of the poorest of the poor who use our facilities,” Poindexter said.
Because the tax is itself taxed, the tax on a $100 purchase would have increased by 26 cents, raising the purchase from $104.17 to $104.43, once the 4 percent state GET is also taken into account.
That translates into $2.27 monthly for a household spending $10,000 annually on taxed items, $11.36 monthly for those spending $50,000 annually and $22.72 monthly for those spending $100,000 annually, Crawford said.
The tax isn’t applied on most medications or on SNAP food assistance.
“I’m extremely grateful for this decision,” Kim said in a statement later. “This is nothing but good for the people of this island. We needed so badly to try to make this a better place. “
Harry Kim to his appointed staff: We fooled them again. We were successful in raising the Gas tax, Property tax, GET, now lets move on with more raises and start the ball moving on those 89 contracts for my pals, lets cancel contracts and postpone development and yes, close parks and programs so the Council will be forced to raise yet another round of taxes. The legacy of Harry Kim.
Well the really screwed the tourism by putting out the fear message. Funny – those guys are circling the area in helicopters paid by us.
Time to vote them out.
Harry Slim Shady. Please sit down please sit down.
“This could be a much better piece of legislation,” O’Hara said… In other words we could really screw people a lot more for a much longer period of time. If we don’t do this there will be hell to pay because no one will make the government work and the only way our way of life can survive is to raise the % of taxes people pay.
Perhaps we could stop rolling over every time the public employee unions make a demand. With the recent Supreme Court decision, these unions will likely lose coerced dues and political influence. Maybe that will be enough for our pols to grow spines. Until then, we all pay more.
…its not the Unions its the corruption.
Those who have to live on fixed income or being homeless will enjoy higher prices. Sure, Mayor Kim needs to be reimbursed for its lost beach house.
Whoo Hooo!
Now we can make sure:
1. we have more raises! (this is such a stressful job)
2. the free cash we give away won’t be touched (501(c)(3) – we still got it!)
3. the leeches, loafers, and druggies will still be covered.
4. the union (forget the Supreme Court decision) will still support us
5. we can hand out money and cut property to our friends (who vote for us)!
and, worst case, we will
cut police, fire, medical, and roads
….because you silly folk will pay! pay! pay! to keep them!
…….especially those who don’t have much money!
Our mayor and counsol members are just big greedy sell outs. They all need to go. Real leaders would of lowered everything they raised. That’s why we vote right to help the PEOPLE. I guess this whole island is missing something. Enjoy your $9.50 gallon of milk, compliments of Dirty Harry.
I was at the store today milk is already $9.25. You can soon thank Harry for your $12.00 a gallon milk. Harry and his bandits starving the elderly and children. Harry all readymade gets about $350,000 a year that’s including his civil defense retirement $$$ that’s all our money. They want us all on welfare so we keep voting for them. Sick Fuks.
One other point is that Harry’s public sector retirement is not taxed here in Hawaii. Private sector retirement is taxed. The corruption and hypocrisy of not having everyone on the same system will bring Hawaii down in the long run. There are plenty of stories out there where beautiful places go bad and we we are certainly beginning a journey down that path.
Way to go you fuckers….take your stupidity out on us! Voting on one of the stupidest bills, your a jack ass for doing so.
I feel like they took a hair dryer to my bung hole turned it on and then inserted…..again!
Oh I hated to vote yes on this bill but we just didn’t have a choice. Your job is so hard, I feel really sorry for you, what a bunch of Hippocrates these counsel people are. And then we are supposed to believe that it will sunset, what kind of fool do they take us for, once they have your money they will never give it back or stop taking it. All I hope is that the people of Hawai’i County remember this when they go to the polls, do not vote for any of the counsel people who voted to raise our taxes (that’s all of them besides Kanuha and Ruggles by the way).