Kenoi aims to raise property taxes 10%


HILO — Across-the-board property tax hikes of about 10 percent, along with increases in bus fares and vehicle registration and weight taxes, will fund a revised county budget proposed Thursday by Mayor Billy Kenoi.

The updated budget follows a parade of county department heads last month pleading poor before the County Council, saying tight budget restrictions over the past four years have left agencies short-staffed and with aging equipment. The new budget adds 28 employees, puts money into the GASB 45 retirement fund and buys new equipment for county agencies.

The budget now goes to the County Council, which will begin its line-item scrutiny at a May 13 meeting. Once passed by the council, it goes into effect July 1.

“This budget tries to accurately reflect the priorities of the County Council and the concerns of the community that came forward,” Kenoi said. “We’re at the point that after years of budget cuts, we need to begin readdressing our needs.”

Kenoi has cut the budget every year since he took office, with his newest proposed $394.3 million budget a 7.9 percent increase over this year, yet still $8.9 million less than when he took office.

Council reaction was mixed on first glance at the revised budget.

Hilo Councilman Dennis Onishi said he was generally in favor of the amended plan because it addresses so many needs of the community. He said he still has questions about exactly how much more the budget will cost and whether more can be put into accounts for information technology and retirement benefits.

“I’m looking at how it raises taxes a little bit for everybody,” Onishi said. “It seems fair.”

The property tax increases would add $150 to the annual tax bill for a $250,000 house in the homeowner class.

Kenoi said it would add $341.88 to the residential class (second homes and rentals), $417.48 to commercial, $560.88 to industrial and $870.48 to hotels and resorts.

Although the tax rate would increase for conservation land, property owners would actually see an average $75.12 annual decrease because property values continued to decrease last year.

Motorists would see their total state and local taxes and fees rise annually by $24.70 to $176.70, the first county increase since 2004. Bus riders would pay $1 more a trip, with regular riders charged $2 and seniors, students and disabled paying $1.

South Kona/Ka‘u Councilwoman Brenda Ford said she was glad to see public safety and information technology beefed up, and like Onishi, was also glad to see money going into GASB 45 retirement benefits.

But Ford said she’s opposed to property tax hikes until a task force completes a study on some 40 recommendations of an outside auditor.

In particular, Ford said, the county could cut its past-due backlog from three years to two years before foreclosure actions are taken as a way to recoup money currently owed to the county. With a $17 million backlog in unpaid property taxes, that could add a minimum $5 million to the budget without raising taxes, she said.

“There are some tax increases I could support,” Ford said. “A property tax increase is not one of them.”

The budget adds five new police officers to Puna and Ka‘u, replacement fire trucks in Keaau and Honokaa, 12 new firefighter positions, two new lifeguards and six new lifeguard towers. A new Waikoloa shuttle bus route would be added as well as expanded service to Puna and two clerks, a mechanic and a mechanic’s helper for Mass Transit.

The Information Technology Department will receive a $300,000 boost for new network equipment. Three new IT positions will be added at a cost of $182,000 and training existing staff will take another $28,000.

“Aging computers have become a drag on worker productivity,” Kenoi said.

The Department of Parks and Recreation will get seven new staff ranging from a pool lifeguard to staff to help in senior programs. Maintenance equipment will also be beefed up in the department.

The budget also accounts for the ending of employee furloughs at a cost of $4.2 million. Salaries for United Public Workers and Hawaii Government Employees Association union workers negotiated at the state level will be increased about 4 percent, adding another $2.9 million to the budget.

Payments into GASB 45 will be increased to $3.1 million, after two years of no new payments going into that account. The county’s debt service, the annual payment on money it has borrowed, increased $3.9 million to $39.2 million.