LIHUE — From taxing car rental companies and charging port fees on cruise ships to simply making cuts in the budget, Kauai County councilmembers bounced ideas off each other in an effort to get the projects off the ground.
“We’ve been turning over every stone we can find to look for additional ways to increase revenue without impacting local residents. Now is not the time to raise taxes,” said Councilman Gary Hooser.
One way to raise funds to pay for $100 million in backlogged road repair projects was to increase the General Excise Tax by half a percent. Supporters of the measure said it would raise $10 million per year for 10 years.
The administration later lowered the tax increase to a quarter of percent. In May, the council voted 4-3 against the bill.
During the Budget and Finance Committee Meeting Wednesday, councilmembers, along with Ken Shimonishi, finance director, and Steven Hunt, Real Property Tax manager, discussed other options to pay for the projects with GET money.
“This stems from the need to take care of our roads, knowing there is a looming amount to take care of,” said Councilman Mason Chock.
Among the ideas tossed around was creating a new tax class for taxing rental car companies or charging an additional daily rate on rental cars.
In taxing those companies, the roads would be fixed by the people who use them the most — tourists.
“Homeowners are already burdened with real property tax,” Hooser said.
However, the county does not have the legal authority to impose such a tax on the businesses. If they wanted to go that route, the council would have to draft a resolution and send it to the state Legislature, he said.
Chock said he’d support drafting such a resolution.
“We should really be looking at our core priorities,” he said.
Jaynette Thomas, location manager at Advantage Rent A Car, located in the Lihue Airport, said the company wouldn’t incur too much financial hardship if such a measure passed.
Because the rental car company already charges five taxes, Thomas believes any extra taxation would be absorbed into what the customers are already paying.
Advantage charges daily fees, as well as airport and concession fees for the use of the airport facility, she said.
“I don’t think taxes will have an effect on the company,” she said.”It’s not going to stop someone from renting a car, if they have to pay $2 or $3 extra.”
But Josh Parks, an employee at Island Cars, LLC. also in Lihue, said small rental car companies, like Island Cars, would be negatively effected by taxes.
“The profit margin is already low, and some of the big companies can drop their rates and beat us,” he said. “I’m picturing this as something that causes our rates to raise, and then we’d compete with the big companies, dollar for dollar, even when our cars are five years old.”
But, thinking along the lines of taxing car rental companies for revenue, Parks suggested the county look at raising the rates of safety checks.
“Even if you raise it by a dollar, it’s something people have to do every year, even the car rental companies,” he said. “It’s only a dollar, but thousands of cars have to get their safety checks.”
During Wednesday’s meeting, Mel Rapozo, council chair, suggested charging port fees on the cruise ships that come through Nawilliwili Harbor.
“We need to look at all different potential kinds of revenue,” he said. “The ships bring thousands of people at one time, and that’s an opportunity we should look at — we charge every passenger who comes off the ship $3 or $4.”
Another option that doesn’t include getting permission from the Legislature is making cuts in the budget, Hooser said.
“We have the legal authority to make cuts, if we believe money is being spent unwisely,” he said.
Councilman KipuKai Kuali’i agreed.
“We need to work even harder to cut expenses,” he said. “We can say we made all the cuts we can make, but I don’t think so.”
He cited the council’s approval of raising salaries for the top tier employees. The money used to increase salaries could have gone toward fixing roads, he said.
But Councilwoman JoAnn Yukimura believes there aren’t any viable options to generate the funds needed to pay for the projects.
“The alternatives aren’t that plentiful, and if they raise money, they aren’t going to raise enough,” she said. “We keep looking and looking, while the roads keep deteriorating and deteriorating.”
Measures like increasing GET, vehicle weight tax and fuel tax were viable options, she said.
“They’re hard options, but if we don’t find a solution, there’s going to be a huge bill that we’re going to give our kids,” she said.