Property tax base maintaining Hawaii County’s operations

HILO, Hawaii — Hawaii County’s reliance on property taxes for operational funds has protected it from the drastic tax losses experienced at the state level during the coronavirus pandemic, officials said.

Property taxes account for the bulk of Mayor Harry Kim’s proposed $625.9 million operating budget that was released on Feb. 29, The Hawaii Tribune-Herald reported Sunday.

Kim is scheduled to release an adjusted proposed budget on May 5.

County property taxes are projected to raise $343.5 million next year. Property owners face a 3.9% increase in property taxes based on an increase in property values.

County Finance Director Deanna Sako and Hawaii County Council Chairman Aaron Chung said it is too early to determine the extent of the budget impact from general excise tax and fuel tax cuts because of the coronavirus.

There could also be ramifications from possible cutbacks in transient accommodation taxes the state government shares with counties, they said.

“We’re all trying to look into our magic crystal ball,” Sako said. “We’re trying to do our best to estimate it, and there are still a lot of unknowns.”

Chung called for a hiring freeze and advocated against creating any employment positions until the county has a better grasp on the economic outlook.

Employee pay and benefits account for more than 65% of the county budget.

About 10% of the county’s 2,888 positions are currently vacant and have been unfunded in the budget, according to county finance department documents.

“We should be proceeding with an eye toward austerity,” Chung said. “But we have to look at everything on a case-by-case basis. I would like to see us exercise some restraint in hiring. If the only way to exercise restraint is by cutting unfunded positions, so be it.”

For most people, the coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, and death.