Mayor Harry Kim on Friday released a $625.9 million operating budget for the upcoming fiscal year, a 6.9% increase over the current year.
The preliminary budget adds no new employees, but factors in increases in negotiated salaries and benefits, including $7.8 million more in retirement benefits mandated by the state Legislature. Retirement contributions have increased 64% for police and fire departments and 41% for general employees over the past four years, the mayor’s budget message says.
“This is a no-frills budget this year,” Finance Director Deanna Sako said.
The budget relies on an average 3.9% increase, or $12.8 million, in property values, meaning property owners are likely to see a bigger tax bite, but there are no hikes in taxes or fees contemplated at this point.
The general excise tax is expected to increase by $18 million, or 56%, as this is the first full year of the full 0.5% county surcharge. Another $2.5 million is expected from previously approved increases in sewer rates and landfill tipping fees.
“The budget should be based on our objectives to provide quality service to the public, while maintaining prudent and conservative spending,” Kim said in his budget message. “This budget still does not include everything needed, but it goes a long way toward providing services required by our community.”
Kim said transportation will be a priority in the coming fiscal year.
Council Chairman Aaron Chung has plans to make that a priority in spades, by using the GET to leverage $103 million in council-initiated bonds to fund road projects. Chung said he’s discussed the issue with the administration, and he’s confident the debt service will be accommodated in the budget.
The bond issue, Bill 145, will be discussed at the council’s March 10 Finance Committee meeting.
Transportation priorities specified in the bill: Ane Keohokalole Highway Phase III—Hina Lani Street to Kaiminani Drive, Puna Connectivity and Emergency Access Routes, Paniolo Avenue Rehabilitation/ Waikoloa Intersection Construction, Kawili Street Shoulder Improvements, Mamalahoa Highway Resurfacing— Hohola Drive to Kekehau Street, Plumeria Street Rehabilitation and Waianuenue Avenue.
“We’re really trying to get the best bang for our buck,” Chung said. “The residents have a reasonable expectation that we’re going to put the money to good use. It’s to make good on our promise that the GET increase was to improve our roads and our transportation system. It’s a first step. And we’re going to leverage it further with grant money.”
The preliminary proposed budget now goes to the County Council, which will hold departmental reviews in April. The mayor’s final proposed budget will be released by May 5. Once amended and passed by the council, it goes into effect July 1.