Property tax hike proposed for Big Island
By Hugh Clark
Advertiser Big Island Bureau
HILO, Hawai'i — Mayor Harry Kim is proposing a property tax increase to dig the county out from under a projected $8.1 million budget shortfall.
Advertiser library photo
The mayor will present his proposed $202.8 million spending plan for fiscal year 2002-03 tomorrow to the Hawai'i County Council. Finance Director Bill Takaba said he would ask the council to consider a property tax increase of 73 cents per $1,000 of assessed value as a starting point for discussion.
Mayor Harry Kim is trying to fill an $8.1 million budget shortfall.
Such an increase would raise the average homeowner's tax bill by $37 a year.
Dixie Kaetsu, the county's managing director, said revenue growth did not keep pace with population and increases in government payroll and services. In the 1990s the population shot up 24 percent and the number of county employees increased 18 percent, with payroll accounting for 70 percent of the budget, she said.
Attorney and former Councilman Brian De Lima, who led a move to cut property taxes in 1993, said he did not expect much public opposition to the tax increase initially. "They'll have to feel the pinch when they get their mortgage payments showing their escrow fund is going up — then you'll hear it," De Lima said.
Council members have mixed reactions to the proposed tax increase.
Bobby Jean Leithead-Todd of Hilo said balancing the budget with cuts would be too severe. But Dominic Yagong of Hamakua called higher taxes "frightening" and said he would like to see what cuts could be made first.
The council will hold public hearings on the budget, but a schedule has not been announced. Kim has until May 5 to submit a final spending plan.
Kim took office in December 2000 with a multimillion-dollar surplus left by Mayor Steve Yamashiro, who kept tight control of the county's pocketbook. In March 2000, Yamashiro projected a surplus of $16.4 million. By January 2001, Kim reported the amount had fallen to $5.9 million.
The dramatic drop in spare cash was due largely to two unexpected events: the November 2000 flooding that caused about $70 million damage on the island, and the dive in tourism after the Sept. 11 terrorist attacks that cut hotel room tax revenues.
The county spent $5 million in flood repairs, with the federal government picking up the rest.
Kim also has had to scramble to cover $7.1 million in additional payroll expenses for pay raises and increases in health costs.
The administration already managed to whittle $5 million in spending to ensure a balanced budget for next year. The savings came largely from canceled equipment purchases and leaving positions vacant.
