HILO — Despite a tight economic year that could require tax hikes to pay for basic services, the Hawaii County Council’s budget includes an extra $900,000 so each council member can have $100,000 to spread around his or her district.
The proposed council budget for the fiscal year that starts July 1, at $4.3 million, is 37.2 percent higher than this year.
It’s part of Mayor Billy Kenoi’s proposed $394.3 million budget that’s $27 million, or 7.4 percent, higher than this year’s budget. The council on Monday swatted away amendments from South Kona/Ka‘u Councilwoman Brenda Ford before advancing the budget to its final hearing May 30. Ford was the lone dissenter on the 8-1 vote.
The council will hold a public hearing at 5 p.m. today on the proposed increases in property taxes. The meeting will be held in Hilo council chambers, with videoconferencing at the West Hawaii Civic Center, Hawaiian Ocean View Estates Community Center and the Pahoa and Waimea council offices. The council will vote on the tax increase on May 30.
The so-called “district contingency relief funds” account for the biggest chunk of the council’s budget increase. But the budget for travel for conferences also has jumped, from $12,600 to $33,000.
The contingency funds were once a part of the council budget but were eliminated four years ago because of the down economy and also in part because of how the money was used. The original purpose of the fund was to have money available, so if a scoreboard broke in the middle of the budget year, for example, the county department could go to the councilor whose district it was and ask for money to repair it.
Spending from the contingency funds has to be approved by the department and also the County Council.
Over the years, the fund morphed into what council members began calling their “discretionary fund,” and it was common practice for councilors to approve each other’s spending requests as a “professional courtesy,” said Corporation Counsel Lincoln Ashida, who’s previously had to advise council members on using the money appropriately.
Critics have in the past called the contingency fund a “slush fund” that’s used to help councilors win re-election.
But Ashida, as well as Kenoi and other administration officials, say the district funds are a good way to ensure overlooked projects are funded. Additional checks and balances are in place by requiring both the department and council as a whole to approve each expenditure, he said.
The contingency funds weren’t requested by the council, said Council Chairman J Yoshimoto. Kenoi said the $100,000 allotted to each council district will be easier to manage than the previous $300,000 that was allotted years ago.
“We believe the $100,000 is a reasonable amount given the size of the council districts,” Kenoi said. “The administration will play an oversight role to ensure the funds will be used to benefit the community and not used as a campaign or slush fund in any way.”
Council members interviewed think the contingency funds are a good idea.
“It gives us more flexibility to help with specific needs,” said Yoshimoto.
“I think it gives us the opportunity to do things in our communities that aren’t in the budget,” said North Kona councilwoman Karen Eoff, the council vice chairwoman. “By working with the departments, we will have a collaboration. It’s the mayor giving us the opportunity to work with his departments.”
The council majority was averse to increasing the estimate of the county’s fund balance — the amount of money left over from prior budget years coupled with an estimate of the current budget year — in order to fund additional departmental needs that Ford proposed in amendments.
“We’re all listening with the same set of ears, if you will, to the needs of the community,” Ford told Kenoi about his increased budget requests. “The question isn’t whether to do it, but how to do it.”
“The big question is how we fund it,” Yoshimoto said. “That remains to be seen.”
The budget is based on property tax hikes of 10.2 to 10.8 percent, depending on the property classification. It’s the first tax hike since 2010, and Kenoi’s second since taking office. In addition to property tax increases, hikes in bus fares, park fees and vehicle registration and weight taxes are also factored into the new budget.
“Nobody likes to propose any tax increases, but we have a responsibility to provide necessary services,” Kenoi said. “We’ve tried to be very conservative with our budget, to minimize any burden on our community while still maintaining core critical government services.”