ANALYSIS: Kenoi’s 10% Tax Hike Not a Spending Spree

Property owners should be prepared to fork over a few more tax dollars in the coming year, assuming Mayor Billy Kenoi succeeds in getting his newly proposed budget approved by the County Council.

But despite seeking to raise an additional 10% in property taxes, the mayor’s budget is no spending spree. Should Kenoi get his way, Hawaii County will actually be spending 8% less in 2013 than it did when he took office five years ago.

The $370,778,473 proposal is the first year-over-year increase since Kenoi took office, and comes on the heels of five straight years of cost-cutting amid falling property tax revenue.

County property tax collections have declined from $225.9 million in 2008 to an expected $198.3 million in the current year, while the county budget was slashed from $403 million to $365 million.

County funding for recycling efforts would be cut under Kenoi’s proposed budget. Photo by Dave Smith.

Additional cuts are scheduled for 2013-2014. The mayor intends on canning county-funded recycling centers, and is opting out of new passenger vehicle purchases for the county fleet.

But after years of trimmed expenses and deferred payments, Kenoi’s new budget includes both significant new expenses, and additional tax burdens. Here are some key highlights from they mayor’s proposal:

More Expenses, Additional Staff

After the United Public Workers and Hawaii Government Employees Association negotiated their new contracts at the state level, our county government estimated an additional $2.9 million would have to be added to the 2013-2014 budget.

In addition to the HGEA and UPW agreements, furloughs for county workers are expected to end this year, costing an added $4.2 million.

Also, after two years of deferring payments on its liabilities, The county will contribute $3.1 million into its GASB 45 account.

New police officer positions in Ka’u and Puna are part of Kenoi’s planned budget.

To improve public safety, Kenoi is requesting five additional police officers each in Ka’u and Puna, 12 new firefighters, and two new beach lifeguards.

With aging technology infrastructure and the public well-adapted to online bill payments, over $800,000 is being sought for information technology improvements. The funds will be also be used to hire three new IT support staffers.

As part of the county’s efforts at increasing food security, $346,000 has been requested for agricultural development and support.

Taxes, Fees Set to Rise

The mayor is seeking approximately 10% more in property tax revenue, increasing collections from $198.3 million to $219 million over the next year.

The average monthly increases in property taxes would range from $8.59 for homeowners to $46.74 for industrial-use properties (see the chart below for the full breakdown).

Info courtesy of mayor’s office.

Motorists would see their total state and local fees rise by $24.70 to $176.70 per year.

Most Hele-On Bus riders would see their fares double, paying $1 more a trip (to a total of $2). Seniors, students and the disabled would pay $1, while children under 5 would still ride for free.

The final fate of the mayor’s budget now rests with the County Council, which will begin reviewing Kenoi’s proposal at a meeting on May 13.

If passed by the council, the budget would go into effect July 1, 2013.