Mayor Harry Kim signed a $490.8 million budget Friday, a 6 percent increase compared with the current fiscal year.
The spending plan, approved by the Hawaii County Council, increases tax rates for all property classes except homeowners and affordable rentals.
Approximately another $36 million is expected to be raised from higher taxes and property valuations in the next budget.
The county administration said it faces higher expenses because of increases in employee wages and retirement contributions. On the revenue side, the county lost $2 million from its share of the state’s transient accommodations tax revenue.
Council members cut about $400,000 from the proposed budget, though some on the council said that didn’t go far enough.
Kim said Monday he supported the changes and appreciates the council members’ work.
Looking ahead to next year, he said the fiscal picture could be more predictable since most of the union negotiations are completed, though perhaps the biggest unknown is what state lawmakers will do next year, particularly with the TAT.
“At this point, the standard rule is watch our costs,” he said.
Kim said he asked departments multiple times to trim expenses but opted not to pursue layoffs to balance the budget. He said he likely would stick with the same approach again if costs outpace revenue.
“I insisted the budget has to be guided by principles,” Kim said. “… We will not be cutting employees because if that person is not needed they should be cut anyway.”
The budget, which takes effect July 1, adds nine new positions, three of which are grant funded.
Tax increases range from about 1 percent for agricultural properties to 10.4 percent for the residential class, which affects those who own second homes.
Rates for the homeowner and affordable rental classes stay at $6.15 per $1,000 assessed valuation.
Tax rates are effective for property tax bills that go out next month.
Additional tax increases could hit Hawaii Island residents’ pocketbooks.
Council members will hold a final vote and hearing on proposed gas tax hikes, which were tentatively scheduled for June 22 and June 23 at the West Hawaii Civic Center.
Under the administration’s plan, the gas tax would increase from 8.8 cents a gallon to 19 cents, followed by 2 cents a year the next two years when it reaches 23 cents.
Council members are considering spreading that out so there is a 6.2-cent increase followed by 4 cents in each of the next two years.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
