LIHUE, Kauai — Kauai County councilors are considering tax increases and service cuts to cope with a projected $8.9 million budget shortfall.
County officials had hoped for a larger share of the transient accommodation tax the state levies on hotel rooms. State lawmakers raised the cap on the counties’ portion of those revenues, from $93 million to $103 million.
The state’s four counties had sought a return to the 44.8 percent share they used to receive. Their haul would have been $165 million in fiscal 2013 under that model.
The Garden Island newspaper reports that Kauai’s share of the transient taxes will rise by $1.4 million. The county had hoped for about $8.6 million more than that.
Kauai’s budget shortfall owes mostly to collective bargaining raises for county employees approved last year.
“Many alternate scenarios are being considered,” Kauai Mayor Bernard Carvalho said. “We must meet our obligations and balance our budget, and are trying to do so without further burdening our taxpayers or sacrificing critical services.”
Officials contend that the counties bear the brunt of providing services for visitors. In Kauai, an island of about 70,000 residents that receives more than 18,000 visitors daily, that strain is significant.
“We may have to look at freezing any public services going forward, which may include housing expansion, additional bus increases, lifeguarding shifts, and of course, the increase in cost as it deals with solid waste,” Kauai County Council Chairman Jay Furfaro told the paper. “We have already, in this budget cycle, planned on some property tax increases. Solid waste tipping fees and motor vehicle weight tax are still being considered but our revenue sources are about exhausted.”
To cope with the shortfall, the county may reduce its contribution to employees’ health plans from 100 percent to 73 percent.