We face difficult decisions when it comes to our budget and the proposed general excise tax (GET). The county faces a $5 million budget deficit, a long-term loss of real property tax revenue, and the second most tax-burdened community in the nation.
I am one who prefers to look at the big picture when legislating, rather than passing laws in a vacuum or “silo” legislation. This might frustrate some, but I hope to explain my perspective on these issues. My goal is to make sure our children can succeed, economically, logically, and culturally here on Hawaii Island.
The answers, however, are not simple.
As you might know, the council was unable to reach an agreement on the budget, thus allowing an unbalanced budget to take effect. The new budget equals $518 million. Our estimated revenue is $513 million.
That’s a $5 million shortfall.
Section 10-9 of the County Charter reads, “If at any time during the fiscal year it appears probable to the mayor that the revenues available will be insufficient to meet the amount appropriated, the mayor shall report to the county council without delay, indicating the amount of the deficit.” We are there now. By law we must act.
Add to the mix the on-going Kilauea eruption displacing many of our neighbors in Puna. County efforts to assist the families affected by the lava flow is expected to total $2 million each month of continued emergency response and related services to support the Puna community
Though the Governor’s Office released $12 million to help deliver these services, the state emergency funds will run out in the next six months.
We need to consider our budget as a package; all revenue and all expenses in context of each other and not consider them separately. Doing so fails to properly plan for the future.
As Finance Director Deanna Sako said during budget hearings, budget cuts might be imminent. But Director Sako deferred making the decision to make any cuts until after the June 19 council vote on the general excise tax (GET) surcharge.
Raising the GET
Though the revenue from the GET might mitigate some of the budget deficit now, it may further harm the economic future of Hawaii Island families. According to WalletHub, Hawaii is ranked second in the nation for the most taxed state. This means that in comparison to others, Hawaii residents are handing over more of their income to government in taxes. This is evidenced in the high costs of living in Hawaii. Such circumstances lead to a weak economic future for our children.
The council must legislate only after looking at the entire picture. We cannot continue to implement laws as if they exist in a vacuum when in fact they operate in a dynamic society. We need to consider our budget as a package; all revenue and all expenses in context of each other and not consider them separately. Doing so fails to properly plan for the future.
My hope for our Community
As the Council considers the GET on June 19, I will be looking at the entire picture to determine how best to balance our budget, while making sure we are not passing laws that will unduly increase the tax burden our community that it must already carry.
Though generally speaking the economy is reasonably strong, our Hawaii Island economy is struggling and a bit fragile. Tourism is our primary economic driver. The volcano has triggered many cancellations for our visitors due to inaccurate news reporting on the volcano’s impact on the whole island. We are seeing a slowdown in the visitor industry that results into sluggish spending and employees seeing their hours reduced.
I have heard from many of you on both sides of the argument. I will continue to seek a path forward to make sure we create a strong and balanced economic future for our children.
For more of a recap on the budget, read the following updates published in the North Hawaii News:
 http://records.hawaiicounty.gov/Weblink/1/edoc/78959/County%20Charter.pdf at page 34.
 http://www.hawaiitribune-herald.com/2018/06/08/hawaii-news/kims-budget-it-is-council-fails-to-approve-amended-version/ (“Sako had presented lists of possible cuts, including a $5 million and a $7 million spending cut scenario.”).