Less stringent PONC fund advances

  • PONC Commissioner Rick Warshauer testifies before the Charter Commission about the public land buying program in Hilo Tuesday.

HILO — A proposed ballot measure reducing the county land fund from a minimum of 2 percent of property tax revenues to a minimum of 1 percent was advanced Friday by the Charter Commission, over objections from fund supporters.

About 20 people, including two former County Council members, volunteers who worked to get the Public Access Open Space and Natural Resources Preservation Commission on the ballot, Sierra Club members and a member of the commission overseeing land purchases, pushed to leave the fund as it is, rather than cut it by half and allow the County Council to suspend it in emergencies or when too much money accumulates.

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“All in all, (the proposed amendment) is a poisonous arrow aimed at the heart of the people’s PONC program,” said PONC Commissioner Rick Warshauer, speaking on his own behalf and not for the commission.

Two top elected officials, however, warned that automatically taking 2 percent of property tax revenue removes flexibility, is not sustainable during tight budget times and could lead to tax increases.

“The hardest thing to do of any kind is to raise property tax … with limited revenues and growing expenses, it’s not easy,” said Mayor Harry Kim. “Yes, I do support the reduction of 2 percent … I think 2 percent is just too much on our limited funds.”

Kim said important land purchases have been made and can still be made with or without it being dictated in the charter.

“We don’t need a law that tells us this is important,” he added.

County Council Chairman Aaron Chung said he originally voted to put the fund issue on the ballot, but he’s reconsidered his support. He noted that the land fund is the only fund that comes off the top of the property tax revenues, while items in the remainder of the budget are prioritized based on need.

“It’s wreaking havoc on our county budget. … It will also at some point result in a tax increase,” Chung said. “If you like tax increases, then keep it at 2 percent.”

The Charter Commission, by an 8-1 vote, advanced the measure, Amendment 7, after removing what some saw as the more onerous portions. Commissioner Michelle Galimba voted no.

“We all want what’s best for Hawaii Island,” she said. “The really important part of the PONC fund is it leverages other funds. I support making it as strong as possible because it’s our legacy for our grandchildren and our great-great grandchildren.”

Some commissioners pointed out that half of the land on Hawaii Island is already zoned as conservation. Hawaii County’s 2 percent land fund is twice as high as the next highest county, they added.

“It is just the minimum. … It’s up to the council if they want to appropriate more,” said Commissioner Christopher Roehrig. “They’re not locked into doing 1 percent. … If they saw this great piece of property and they wanted to buy it, they can buy it. … Nothing is stopping them.”

The commission clarified that 1 percent is a minimum rather than a set percentage, and it removed a provision where the County Council could suspend deposits to the fund if it accumulated to a certain amount.

Remaining in the amendment is wording allowing the County Council, by a two-thirds vote, to suspend the fund if the finance director determines in writing that the suspension of the appropriation is “necessary to prevent a reduction in the level of public services.”

The proposal also doesn’t include a restrictive covenant forbidding title transfer, meaning the county could pass along the land by donation or sale to another entity. Proponents said Hawaii County is the only county with the restrictive clause in its land fund laws.

The proposed changes have a long way to go before they make it to the 2020 general election ballot for a public vote. The proposed ballot measure next goes to first reading of the commission, a public hearing, a second Charter Commission reading and then to the County Council, which can’t kill the measure but is allowed to offer alternatives.

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The fund, administered by the PONC commission, has so far purchased 14 properties totaling about 4,451 acres, at a cost of $39.34 million, with about $10.5 million coming from outside grants. The property accounts for $21,818 worth of property taxes annually removed from the tax base.

There was $19.6 million in the preservation fund as of Nov. 30, with another $6 million annually expected at the current property value and tax rates. There was $2.9 million in the maintenance fund.