Taking advantage of a modest property value revival and an unexpected bonus from the state, Mayor Billy Kenoi on Monday sent the County Council a revised operating budget that’s 5.7 percent higher than last year.
The additional revenue is coming from an extra $1.7 million in property taxes due to higher property values, an extra $1.86 million in the county’s share of transient accommodations tax from the state, $770,000 more carried over from the previous budget year and other sources.
There are no hikes in property taxes or fees in the proposed budget. More than $20 million of the $22.6 million increase is targeted for employee raises and increases in benefits.
The County Council has scheduled its first reading of the budget for 8 a.m. May 14 in Hilo council chambers. Once passed by the council, the budget goes back to the mayor for his signature or veto. The spending plan goes into effect July 1.
Kenoi said he had many more requests from the administrative departments for uses for the extra money than there was extra money, but he managed to settle on several important ones.
“We tried to address priority concerns,” Kenoi said. “We couldn’t get everything.”
Kenoi wants to use the entire amount of the extra transient accommodations tax to bolster the county’s GASB 45 account for future health benefits for retirees. The TAT is a surcharge on hotel rooms and rentals of less than 180 consecutive days.
The $1.86 million brings the county’s payment into the GASB 45 account to $6.1 million, compared to $3.2 million last year.
That move pleased some council members.
“I believe that’s a good decision to apply the extra money for future health-care costs,” Yoshimoto said. “We need to make sure we have enough money to pay for that obligation. We haven’t been putting as much as we should have and this helps make up for that.”
Finance Committee Chairwoman Valerie Poindexter said many budget-watchers have been wondering where the mayor planned on putting the bonus TAT money. The extra money was a compromise by state legislators this past session, after the mayors and the county councils together lobbied for the return of the counties’ full share of the money that was capped four years ago because of the sour economy.
“I think this is a strategic financial decision on the part of the administration,” Poindexter said.
Poindexter said she’s sure council members will have a good discussion of the budget, and she’s waiting to hear from them and constituents before making a decision.
“The bottom line is we need to make sure the budget serves the needs of our community,” she said.
Kenoi’s $416.9 million spending plan includes 10 new positions and increasing a part-time employee to full time. Four of the new positions go to the Office of the Prosecuting Attorney, including a new deputy prosecutor and three new clerks. The new positions are needed to handle changes in judiciary requirements, Kenoi said in his budget message.
The Ocean Safety Division of the Fire Department will get an extra $320,000 for four new water safety officer positions, and funding to start pilot personal watercraft programs in East Hawaii and West Hawaii. The watercraft, often known by the Kawasaki brand name Jet Ski, will enable rescuers to get to swimmers in distress more quickly.
“We have been fortunate, but looking around at the other islands, they’ve had a disproportionate amount of unfortunate incidents,” Kenoi said. “When we have an opportunity to improve water safety for both residents and visitors, I think it behooves us to do as much as we can do.”
Other added positions are an information analyst for the Information Technology Department, and a new park caretaker and an increase to full time for a part-time caretaker for the Department of Parks and Recreation.
Property taxes are by far the biggest source of revenue for county government. The county’s share of TAT is second. The county also brings in revenue from state and federal grants, interest and user fees.
