Roth budget tops $609M: No-new-taxes plan relies on property values, grants

  • Mitch Roth

Bolstered by rising property values, an increase in grants and more money left over than anticipated, Mayor Mitch Roth on Wednesday released a $609.1 million no-new-taxes budget, a 3.9% increase over this year.

The plan anticipates $10.5 million more from property taxes through increased evaluations as well as $5 million more in grants and $3.1 million more saved from this year’s budget.

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On the spending side, 12 new positions were added and two part-time positions converted to full-time. The positions are predominantly in Planning, Housing and Public Works. The budget also puts $5 million into the catch-up portion of post-employment retirement benefits to soften the blow from future costs.

The spending plan next goes to the County Council, which can make its own amendments and consider property tax rates before passing a budget that goes into effect July 1.

“As our county continues to grapple with continued challenges posed by COVID-19 while maintaining our services to the public to the best of our ability, we understand the need for prudent and responsible budgeting,” Roth said in a statement.

“However, we also understand the need for us to come together as a community to find thoughtful and creative solutions to help us thrive through the most difficult times our island has ever seen,” he said. “By sticking together, spending responsibly and continuing to seek innovative solutions to the many issues at hand, we are confident that we will be able to get our island back to the vibrant home that we all know and love — for generations to come.”

The county has to shoulder more of the burden from what formerly were state expenditures, such as the $19 million in transient accommodations tax revenue from hotels and short-term rentals, as the cash-strapped Legislature looked after its own budget.

House Bill 862, would, if signed by the governor, end the counties’ share of the tax while allowing them to impose their own additional TAT at a rate as high as 3%.

Puna Councilman Matt Kaneali‘i-Kleinfelder, who chairs the council’s Finance Committee, said the council might consider that option if it becomes necessary. He said no one from the administration or fellow council members have submitted anything to his committee to indicate there’s any interest in raising property taxes.

“If passed by the governor, the recent allowance by the state Legislature to allow a 3% county TAT will equate to increased revenue linked directly to tourism numbers,” Kaneali‘i-Kleinfelder said. “This may deter thoughts of tax increases.”

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Roth has said he opposes the tax option as it burdens local hotels.

The state also cut back to half its $1.3 million in funding for lifeguards at state beaches, an important issue to West Hawaii, home of the popular Kua Bay and Hapuna beaches. County Finance Director Deanna Sako said the county will find the remainder, although it wasn’t specifically budgeted for because the state information on the cuts came too late for the county to work them in by its Wednesday deadline.

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