Mayor’s budget holds steady

BY NANCY COOK LAUER

WEST HAWAII TODAY

ncook-lauer@westhawaiitoday.com

HILO — Mayor Billy Kenoi on Thursday unveiled an election year status quo budget that holds the line on property taxes, maintains monthly employee furloughs, eliminates the West Hawaii golf subsidy and again postpones advance payments on health care for retired employees.

The $365.3 million spending plan is a scant 0.5 percent less than this year’s budget and 9.4 percent less than when Kenoi took office in 2008. It’s based on a projected decrease in property taxes of $8.8 million, or 4.2 percent.

“This year was tough. … We had already cut as much as we felt we could cut,” Kenoi said. “We also realize that people, businesses, individuals cannot sustain a property tax increase, when people have been experiencing so many challenges for so long.”

Property taxes are the single largest revenue source, accounting for 54.3 percent of the budget, and more than three-quarters of that comes from West Hawaii. Taxes were raised for many categories in the 2010-11 budget, but the rates for residential homeowners didn’t go up.

By holding the line on spending and keeping 200 funded positions unfilled, the administration was able to bring forward $18 million that wasn’t spent in the previous budget year. The county is also cutting the solid waste fund by 10 percent, saving $2.8 million, but Kenoi said there will be no reduction in services.

The budget now goes to the County Council, which will spend hours in the coming weeks going over the document line-by-line and hearing budget presentations from each county department.

The council doesn’t begin its amendment process until Kenoi releases his final budget May 5. The budget then goes into effect July 1.

The spending plan keeps a $1.5 million grant program for nonprofits and maintains programs for keiki and kupuna, areas Kenoi has pledged to hold harmless from severe budget cuts.

The $500,000 subsidy that goes to private West Hawaii golf courses for resident play has been eliminated. But no cuts were made to the Hilo Municipal Golf Course, although the resident fees were raised Thursday from $12 weekdays and $15 weekends to $15 and $20 respectively.

Like the previous year, the county is withholding a planned $20 million payment into GASB-45, which pays medical care for retired county employees.

Kenoi insists the deferrals will not hurt the county’s credit rating or risk retirees’ health plans. He said the county had $61 million in the account and paid $150,000 more than required in the 2010-11 fiscal year.

“We talked to our actuaries” about that deferral, Kenoi said. “They said ‘no problem.'”

Some County Council members have repeatedly criticized the payment deferral, claiming the county isn’t paying its bills. Attempts to put money back into the account last year failed, however, when the council couldn’t muster the votes to override Kenoi’s veto of its budget.

Council Chairman Dominic Yagong, who’s running for mayor against Kenoi, said Thursday evening he couldn’t comment about the budget until he reads it.

“I’m going to go over the budget with a fine-toothed comb over the weekend,” Yagong said. “As you know, the devil is in the details.”

Kenoi, who addressed the media from Honolulu on a speaker phone in his Hilo office, said he is proud of his Finance Department and Managing Director Bill Takaba for their hard work bringing the budget in without having to raise taxes. Kenoi is in Honolulu with the other island mayors and Gov. Neil Abercrombie attending sister-city signing ceremonies with city representatives from the Philippines.

The mayor reiterated he welcomes input from the County Council. He added, however, that council members must find other places to cut if they want to add anything into the budget.

“I don’t know what the County Council is going to say, but it’s their budget after today,” Kenoi said. “Everything in the budget is up to their consideration.”