WAILUKU, Maui — With Maui's strong real-estate market expected to boost property tax valuations by 32 percent in the next fiscal year, Maui County Mayor Alan Arakawa is calling for a reduction in tax rates across the board.

Arakawa's proposed $542.2 million county budget for fiscal year 2007 estimates $200 million in property tax collections on projected valuations totaling $37.2 billion. That's $38.3 million more in anticipated property-tax revenue than in the current fiscal year.

Homeowners would get a nearly 39 percent reduction in property-tax rates under the budget proposal, which also asks for an 11.2 percent rate cut in each of the classifications for improved residential and apartment dwellings, and a range of rate cuts for other property classifications.

Real-property taxes account for 42.8 percent of county revenue.

"The proposed budget reflects the reality of a rapidly growing community. The continued strong state economy and Maui's attraction for outside investments, particularly from California, have fueled much of the growth, keeping the value of Maui County real estate at record levels," Arakawa said in his budget message.

The median sale price of a single-family home on Maui was just under $700,000 last month.

Maui's visitor industry also is expected to remain robust in fiscal 2007, with the county anticipating $20.2 million from its share of the state's hotel tax, up 7 percent from this fiscal year.

Arakawa, who is up for re-election this year, said the county's healthy economy and prudent fiscal policies will result in carry-over savings of $18 million that can be put aside for natural disasters and other unforeseen expenses.

The county's operating budget, which funds day-to-day operations and services, would increase more than 13 percent to $408.8 million under the proposed fiscal 2007 budget, with spending on capital-improvement projects at $133.4 million, an increase of 64 percent.

Major capital-improvement projects include a new fire station in Kaunakakai; acquisition of a Central Maui water intake system; the purchase of 27.9 acres in Ha'iku for a county service complex with a fire station, police station and emergency center; tennis courts in Kula; and design of a Kihei police station. Also included are nearly $26 million in wastewater system improvements and $11.7 million for water projects.

The budget funds the equivalent of 2,340 job positions — 88 more than in the current year.

The Maui Police Department is requesting 10 officers for an additional beat in the growing Wailuku area and 14 support staff to free officers from clerical and administrative tasks. Another 10 positions are being sought for the Division of Motor Vehicle Licensing, which has been criticized for inadequate public service.

The budget also asks for six additional park workers, eight for the Highways Division, and five for the Department of Management to establish a centralized call center to better handle calls from the public for information and the initiation of service.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.