Doubling up — tax hike advances

  • Finance Director Deanna Sako and Mayor Harry Kim field council questions Monday on the general excise tax. (Nancy Cook Lauer/West Hawaii Today)

HILO — A doubling and 10-year extension of the county’s general excise tax moved forward Monday on an 8-1 vote after the County Council Finance Committee heard dire warnings of property tax hikes and service cuts from Mayor Harry Kim.

Property values — the underpinning of the county budget — have not yet been set, but Finance Director Deanna Sako said costs outside the county’s control, such as collective bargaining and retirement costs of public safety employees in particular, portend another tight budget year.

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Kim said his administration has already cut costs and not being able to tap into the full one-half percent of the county’s option on the GET could spell property tax hikes. There just isn’t enough money, he said.

“It’s not easy to sit down before you and say it is not there … an alternative is constantly going back to the property tax,” Kim said. “We truly feel the least harm — and all of it is harm — would be to raise the general excise tax.”

The tax hike faces two council votes and a public hearing before becoming law. It would go into effect Jan. 1, replacing the one-quarter percent GET that started just a month ago.

Several council members were dubious that raising the GET is the best course of action, but they ultimately voted to forward the measure to the council with a positive recommendation.

“I’m just hoping we’d get to the point that we’ll have a budget and don’t have to raise anything,” said Finance Committee Chairwoman Maile David, representing South Kona/Ka‘u.

Kohala Councilman Tim Richards was the sole “no” vote. He’s not convinced the county has done all it can to manage costs and he wanted to hear some numbers before approving more taxes.

“When I took office, the budget was $461 million; now it’s $518 million, a 13 percent increase,” Richards said. “I’m not supportive of any tax increase if I don’t know what the budget is. … Every budget, we’re raising taxes, raising taxes and I have an issue with that.”

Increasing the GET will bring an anticipated $50 million annually, compared to the current $25 million annually. The county is lobbying the state Legislature to give it more flexibility in how the money is spent, so it doesn’t have to be used solely for roads, mass transit and trails.

The county’s one-half cent GET would be in addition to the state’s 4-cent tax. The county share would add 52 cents to a $100 bag of groceries, with the county share costing $100 annually to a household spending $20,000 on eligible expenses or $250 for those spending $50,000.

The tax is charged on most everything, except for federal food assistance programs such as SNAP food stamps and the WIC program, prescription drugs and prosthetic devices. It’s estimated that tourists pick up 25 percent to 35 percent of the tax.

Proponents of the GET hike include nonprofits such as the Hawaii Public Health Institute and Blue Zones Project. The county is woefully behind on making roads safe for all modes of transportation because there’s never enough money, advocates said.

“Mass transit has to happen so the poor can get to jobs,” said Carol Ignacio, Blue Zones government and community affairs manager. “Plans, plans, plans. We need some action.”

Opponents include business groups such as Hawaii Island Board of Realtors and the Kohala Coast Resort Association. Increasing the GET will increase the cost of living for residents and tourists alike, they said.

“Any increase in the general excise tax is an increase to all citizen’s cost of living as well as their cost of doing business,” said Joy Dillon, a co-chair for the Board of Realtors government affairs committee.

Stephanie Donoho, administrative director for the Kohala Coast Resort Association, said the county should start by enforcing existing laws, addressing inefficiencies and making vacation rental operations pay equivalent property taxes as well as transient accommodations taxes and GET. Donoho pointed to a recent Hawaii Tourism Authority report that she said showed 13,396 transient vacation rental rooms on the Big Island compared to 6,110 hotel rooms.

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“They are not paying same property tax as our resorts are and those should be addressed first,” Donoho said. “The visitor industry has been hit very hard in the last year. … We are doing our level best keeping the 5,000 people employed.”

This article has been corrected to clarify that Peoples Advocacy for Trails Hawaii did not submit testimony but its executive director, Tina Clothier, spoke as an individual on her own behalf.

  1. diverdave February 5, 2019 2:21 am

    It’s never enough with tax and spenders. Sooner or later they will run out of other people’s money.


  2. Kona Wahoo February 5, 2019 2:29 am

    Keep putting democrats into office Hawaii and these are the results you will reap. Higher taxes and wasted money. Seemed to be plenty of money around to give themselves all nice raises but not enough to benefit the public.


    1. Pono Pulapula February 5, 2019 11:55 am

      Harry Kim used to be a republican. Then he was a democrat. But all we know for sure is he’s a horrible budgeter.


  3. IRLOYAL February 5, 2019 5:28 am

    A good answer would be to open the door on the VRBO/Air BNB rentals and then enforce existing tax laws with them. There is a significant amount of tax money just waiting to be collected from the tourism market.

    The legislature claims enforcement is difficult with the Air BNB units, so it’s easy to just add taxes at a point of sale. Well if these rubes we have elected can’t figure out a way to collect lawfully owed taxes, let’s get some people to represent us who can.


  4. LOL in Kona February 5, 2019 6:07 am

    Taxes! Taxes! They need more $$$$!

    The “elite” (mayor et al) need another raise!
    ….of course, they can’t/couldn’t/won’t negotiate to let YOU
    …..see the lava tube near the airport,
    ….unless YOU give them more $$$$
    They have friends who aren’t working for the goberment!
    Only 30,000 “food stamp”
    …..oops, needs to be called “SNAP” to avoid embarrassing them
    votes (out of 120,000
    votes) so they need MORE! MORE! MORE!

    Yep, theys is good folk who deserve YOUR money!!
    ….you have sooooo much (that you worked for) and they
    …….have to pay the “once hired, can’t be fired” goberment folk!


  5. Scooby February 5, 2019 6:59 am

    Not easy to sit in front of the council and ask for tax increases….bwaaaahahahahaha, Lying turd. Cut your appointed staff, furloughs, freeze vacancies, revert raises back to when you took office, and yes, cut some services! Sako says collective bargaining is out of their control? Another big fat lie, she along with Brillhante and Corp Counsel negotiated and participated in every collective bargaining agreement!


    1. Pono Pulapula February 5, 2019 11:54 am

      It’s not easy to ask for more taxes – that’s why Harry Kim practices every chance he gets.


  6. beyond kona February 5, 2019 7:29 am

    Beyond the basic question Tim Richards rightly raises, is the County doing everything to live within its means, is fundamental cost issue for all taxpayers “…costs outside the county’s control, such as collective bargaining and retirement costs of public safety employees in particular…” will continue to escalate as the number of retirees grows and there is no effective counter balance to collective bargaining stakeholders and their benefit demands on the public and its tax payer funded underwriting of those costly demands.


  7. briala February 5, 2019 7:43 am

    “Kim said his administration has already cut costs”

    “When I took office, the budget was $461 million; now it’s $518 million, a 13 percent increase,” Richards said.

    One of these quotes does not match the other. I wonder which is less accurate?


    1. Chickie Galore February 5, 2019 11:55 am

      “New math”.


    2. Pono Pulapula February 5, 2019 11:56 am

      And remember, Richards has only been in office two years.


  8. 4whatitsworth February 5, 2019 7:45 am

    Question: What will they do with the funds from this tax increase?

    Answer: The same thing they did with the funds from the last tax increases, give it to themselves and their friends and then say “it is all out of their control” and “there is just not enough money”.

    At some point we either turn into Puerto Rico or start fixing our government. Just basic services like DMV and Building Permits are an absolute mess and we can’t police the homeless. Does anyone really think that mass transit and other missing social services are the real problems?

    A few easy answers for increasing revenue: 1) Get more of the state TAT 2) Start taxing government pensions 3) Start building new neighborhoods and infrastructure.


    1. Scooby February 5, 2019 8:20 am

      The unions will say the county has the funds to give pay raises and increase benefits…the cycle continues. Reduce the size of government to include furloughs and hiring freeze, and revert previous pay raises to appointed staff.


      1. 4whatitsworth February 5, 2019 8:39 am

        Agreed. I think we could reduce the size of the government 20% and no one would even notice. Even with a government reduction if the state keeps taking local tax dollars (TAT and they tried to take a run at property tax), and people who pay income and property tax keep moving (This is happening now), and there are insufficient investments made where revenue is generated (The West Side for example) there is will still be a problem.

        I think that the real issue at the moment is that we just keep feeding the beast. As you point out we are allowing the unions to pillage any available public resources, and the size of the government and its payroll to grow dramatically. The bigger the government, and the larger its expense, the harder it is going to be to fix in the long run. Hawaii is already in the top 5 states for unfunded public pension liability.


      2. wasabi February 5, 2019 12:03 pm

        The state is 7 BILLION Dollars short already on committed pension benefits.
        Junkies and Union shills.


  9. Chickie Galore February 5, 2019 11:54 am

    GET OUT OF MY POCKET. HOW CAN WE (SMALL BUSINESS) HIRE ANYONE WHEN YOU STEAL OUR INCOME? AND NEVER SPEND IT ON WHAT THE CONSTITUENTS WANT! JUST WHATEVER WILL ALLOW YOU TO SKIM SOME FOR YOURSELVES! TOO BAD WE CAN’T SPLIT THE COUNTY BUT YOU DON’T WANT TO KILL YOUR MILK COW, DO YOU HILO? (Sorry about the caps, but yes, I was yelling!)


  10. Frank M. Pelteson February 5, 2019 11:57 am

    All politicians today are Keynesians. John Maynard Keynes wanted to tax and tax and spend and spend. What this really meant was that he wanted to tax and tax the Middle Class and Spend and Spend on the lower classes, leading to the bankruptcy of a nation. Example of this is today’s Venezuela. Will Hawaii become like Venezuela? We’ll see.


  11. Pono Pulapula February 5, 2019 11:58 am

    I don’t mind paying a little extra in taxes if it went to useful projects or services. How many tax hikes already were supposed to fix the roads and buses? Always some excuse, but the roads in my neighborhood are still horrible.


  12. wasabi February 5, 2019 12:01 pm

    Harry is a tax addict with a salary commission that favors county employees over citizen taxpayers.
    FURLOUGHS you dummy.


  13. wasabi February 5, 2019 12:04 pm

    Harry Kims “NEW Improved” Green Harvest.


  14. Don Hurzeler February 5, 2019 1:18 pm

    Just for the record….the number one thing I DO NOT want from my local government is more taxes. I for one am sick of the ever creeping increase in taxes and subsequent government spending. There seems to be no end to it….EVER. Take taxes down, cut expenses, cut programs….cut it out. And, just to be clear, I WANT LOWER TAXES NOT MORE. I had a pretty high view of Democrats until I ran into this crew….the never ending tax increasers.


  15. guest February 5, 2019 4:49 pm

    Toss them all out including the union thief’s and their contracts, then start over from base zero! Tax, spend, tax, spend, tax, tax, spend, spend!

    Richards seems to be the only one with any sense at all.


  16. paul February 5, 2019 5:15 pm

    many great comments…final anaylasis…incredibily incompetent,pathetic,wasteful,lying,greedy government..in time this will lead to the downfall of Hawaii especially the Big Island


  17. onceawarrior February 5, 2019 7:54 pm

    The Mayor proposes. The Council disposes.
    Politely, I would ask the Mayor and Council what I want.
    I suspect the Mayor likes to emulate attractive administrative techniques mainland municipalities use.
    Mayor Kim appears quirky at times, but he is not stupid.


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