UPDATE FROM THE OFFICE OF COUNCILMAN TIM RICHARDS - DISTRICT 9
As you are all aware, my Council update has been absent for the past few months. To bring people up to speed, during a campaign season articles like mine are considered campaigning and cannot legally have space given to any candidate as that violates law. Thank you to all that have called in asking where it has been. Due to the calls, and the fact that it is my duty to keep my constituents informed, I decided to write my County Council update but this time have it paid for by The Friends of Tim Richards for Re-Election to County Council. My constituents deserve continued updates on their Hawai‘i Island County government, and I am happy to do so.
With that, here is the update of some of the happenings in the County of Hawai‘i.
BUDGET 2018–2019 & GE TAX UPDATE
The May version of the budget for 2018-2019 was for $518 million. When the volcanic eruption started, the unknown of the future of our County and its finances was center stage. By law, our County must have a balanced budget by July 1. The months of May and June were a flurry of 24 hour operations of the County of Hawai‘i administering to the needs of the people of Puna. Coordinating public safety, road repair and assessment, and all the shelter activities pulled hard on its resources. The County was running approximately $2 million per month in overtime expenses dealing with the impact of the volcano. We have lost over 700 homes displacing many, many people. Our Real Property Tax Office has calculated that with the loss homes and property, the tax revenue will be $5 million less than initially planned.
What this translates into is a proposed budget of $518 million with a $513 million revenue stream; the budget was not balanced.
As many of you recall, I was open to supporting a half percent increase in our GE tax as long as there was a reduction in the fuel and real property taxes for our people. Had that gone through, roughly speaking our constituents would have had no change in their overall tax burden but the income stream would have been more diversified for Hawai‘i County. The added revenue would have been paid by our visitors. That plan took a large effort of coordination to bring to the table but all went out the window when the eruption started and put the County of Hawai‘i’s finances in question.
Governor Ige released $12 million from the State to support our island’s emergency efforts. This gave us funding to offset that $2 million a month in overtime and other eruption related expenses, however, these funds could not be used toward our budget. What came before us as a stop-gap measure by the County administration was a 0.25% GE tax increase for two years (unless extended) instead of the 0.50% increase. This measure was unfortunately put upon us yet is a simply a Band-Aid, and not a long-term solution. It did help balance our budget for this current fiscal year, as the projected revenue is $10 million, however we only needed $5 million. The other $5 million will be held in a special fund by the County Council. The Administration had brought plans on how they wanted to spend the excess $5 million but the County Council stood firm to holding these funds in reserve as we are unsure of the financial future of the County of Hawai‘i at this point. Stay tuned.
In all of this, the severe impact on the economy of the County of Hawai‘i is my biggest concern. Everyone has recently seen that Jacks’ Tours has announced its closing. My understanding is that other tour operators are struggling as well. The Kohala Coast Resort Association has put out a communication stating that their membership resorts have lost over $25 million in hotel cancellations for the months of May and June alone. This, plus the ripple down effect of the millions of dollars lost in restaurants, car rental, activities, etc. has a severe impact on the financial success and future of the County of Hawai‘i, its island residents, businesses and visitors alike. There are very difficult decisions ahead for our Council and our County as a whole.
BILL 108; VACATION RENTAL BY OWNERS
This bill has been in the works for over six months. Hawai‘i County is the only county in the State that does not regulate vacation rentals by owners. Over the last several months, this has been in the Council Committee level being crafted and recrafted to attempt to address the concerns and needs of our people. We have heard from many, many people. For those of you who have testified or submitted written testimony, thank you; it has not fallen on deaf ears. However, this is complex. From where I sit, many of the issues that are raised have to do with a “bad neighbor” situation. Specifically, some guests in the vacation rentals are badly impacting the neighboring properties with noise or attitude or activity. This impact is eroding the community fabric and accordingly our local lifestyle and quality of life. Understandably, there are many perspectives and opinions with no easy answers; certainly one size does not fit all. Who has vacation rentals and how are they being used? We have it all; local families making ends meet, outside investors capitalizing on this, starting farms financing their startup cost, retirees augmenting their income and increasing their standard of living just to name a few. In some instances the vacation rentals are enhancing communities, and other situations they are deleteriously impacting the quality of life for the neighbors. There is economic value for the County of Hawai‘i as a whole, but the economic impact on the services of the county as a whole is taking its toll. Are the appropriate GE and TAT (Transient Accommodations) taxes being paid? In some instances the resounding answer is no. Do vacation rentals by owners offer a different visitor experience? Yes, that does attract visitors but if we are harming our communities is it worth the cost? All of these points have been discussed and are being evaluated. This week the Council Committee decided to send the draft bill over to the County of Hawai‘i Planning Commission for input. More public hearings will be held as we try to come up with a fair and reasonable level regulatory oversight.
DISTRICT 9 ROADS:
One of the big challenges that we have been working on in District 9 has to do with road maintenance. On our island we have State roads, County roads, private roads, and roads-in-limbo. The State is responsible for maintaining State roads. The County maintains County roads. Private entities are supposed to maintain private roads, yet in many instances these private roads are not being maintained to the level they need to be. Roads-in-limbo are roads that neither State nor County claim jurisdiction over. To be classified as a road-in-limbo the road must have been built, or planned by the State or the Territorial government. This is where the argument starts as to whether some roads that are classified as private might actually be qualified to be a road-in-limbo instead. In the 1960s, the State of Hawai‘i passed a law that these so called roads-in-limbo be the responsibility of their respective counties. The counties objected but there was no recourse. The State has provided a small amount of funding toward this effort, however the maintenance of and any repaving of these roads-in-limbo will cost millions. In Kohala, two roads that we have been trying to work on is Hala‘ula and Union Mill. I have sat with the Department of Public Works to try to come up with some sort of plan or process to address the unsafe road conditions; however their hands are tied as said roads are documented as private and are not County roads, nor roads-in-limbo. There are no simple answers. My office will continue to look for a solution for the road repair.
As always, it continues to be a great privilege to serve as your Councilman and I look forward to our future together.
This was printed in North Hawaii News on August 6th, 2018
PAID FOR BY THE FRIENDS OF TIM RICHARDS FOR RE-ELECTION TO COUNTY COUNCIL | P.O. Box 6741, Kamuela, Hawai‘i 96743
Friends of Tim Richards
PO Box 6741
Kamuela, HI 96743