Budget plans suggest outer islands healthy
By Timothy Hurley and Jan TenBruggencate
Advertiser Staff Writers
Despite the downturn that followed the Sept. 11 attacks, Maui and Kaua'i have come through in good economic condition, the islands' respective mayors declared yesterday in unveiling their proposed budgets for the coming fiscal year.
Mayor James "Kimo'' Apana said Maui County lost millions of dollars in hotel tax revenue but emerged in good fiscal shape without need of a tax increase.
The mayor's proposed fiscal year 2003 county budget, unveiled in a speech before the Maui County Council in Wailuku, totals
$273 million, or about $6.5 million less than last year's budget.
Apana credited "sound fiscal management" for giving the county the flexibility to survive the effects of Sept. 11, including an expected reduction of nearly $2.8 million in transient accommodations taxes this year and more next year.
Kaua'i County Mayor Maryanne Kusaka proposed an $89.3 million county operating budget for the coming year, and included a tax rate cut to soften the blow of increased property values.
Kusaka, who has faced difficult financial times during much of her seven years in office, said she was pleased to report that the county's economy — for a change — was not in crisis.
"Over the last two years, our financial picture has stabilized to a significant degree," she said, citing good visitor numbers, stronger real estate sales and lower unemployment. Her proposed budget was delivered to the County Council in Lihu'e late yesterday afternoon. The council is expected to approve a final budget by the end of May for the fiscal year beginning July 1.
Apana's proposal includes a $3.6 million allocation to the Maui Visitors Bureau in what the mayor called a recognition of the visitor industry's importance to the county's economic security.
"This is the largest amount the bureau has ever received, but in light of Sept. 11, growing competition and the economic picture in our target markets, this investment is both prudent and responsible,'' he said.
The additional money, he said, will allow the agency to expand the county's efforts to bring new economic opportunities to Moloka'i and Lana'i.
Apana also has proposed more than $17.5 million for maintaining and improving county roads and highways.
Included in that amount is $1 million for the construction of a traffic "relief road" for Hono-api'ilani Highway at Lahainaluna Road and $100,000 for planning a new road mauka of the existing Honoapi'ilani Highway in a move the mayor hopes will demonstrate to the state the need to replace the existing roadway.
Apana also proposed a $250,000 allocation to keep the state's expired Emergency Environmental Work Force going in Hana to fight dengue fever until the state Legislature approves additional money. This is in addition to $100,000 that was recently released to support the crews that, in part, are cleaning up potential mosquito breeding areas in East Maui.
The budget also sets aside $2 million for open-space land acquisition, $2 million for parks land acquisition and money to hire two park rangers who will monitor new and proposed county camp grounds.
Councilman Alan Arakawa, a likely opponent to Apana in the next mayoral election, said he was disappointed with the budget proposals.
"It was a flowery speech, but weak in content. I heard no real direction," Arakawa said.
Apana said that while employee costs will rise by $9 million due to increases in personnel and contract obligations, expenditures for construction projects are earmarked for a $10 million reduction.
On Kaua'i, Kusaka proposes to cut real property tax rates by 15 cents per $1,000 of assessed value across all categories of real estate. For a resident homeowner in the homestead land classification, it would mean a $33 cut in taxes on a $220,000 home.
Even with that cut, which is estimated to reduce county revenues by about $1 million from level tax rates, real property revenues should be up about 8 percent, or $3.1 million. That should barely cover an expected $3 million increase in county payroll costs, which represent 44 percent of the operating budget.
One of the big financial issues that Kaua'i County will face in the coming years is the establishment of a new county landfill, since the existing facility in Kekaha is expected to reach capacity in a few years. Two weeks ago, County Council Chairman Ron Kouchi said he opposed the administration's proposal to place a new landfill on a site near Hanama'ulu, and Kusaka in her budget message appeared to concede that considerations of that site had been dropped.
"The county is challenged with finding a suitable new landfill site as quickly as possible," she said in her budget message. She said she hopes to identify and buy a new site within the year.
The new proposed budget compares to an $81.5 million budget for the current fiscal year. However, the new budget includes several largely federally funded department budgets that were not included in this year's total figure. When comparable budget categories are included, the new budget represents a 5.6 percent increase in county spending.
