Council begins budget process

LIHUE — The Kauai County Council began work Wednesday on Mayor Bernard Carvalho, Jr.’s proposed $204 million operating budget for fiscal year 2017-2018.

“For me, it’s what do we cut and how do we cut,” said Councilman Ross Kagawa.

It begins with taking a look at county employee salaries and benefits, which makes up about 80 percent of the budget, Kagawa said.

For example, salaries for police and firemen have increased steadily over the last couple years, he said.

“If we’re really going to have a sustainable future for our budget, we’re going to have to address police and fire salaries,” he said.

On Wednesday, the council passed, on first reading, several measures regarding the budget. The action is a procedural measure, which allows the budget to be discussed at future meetings.

One is Resolution No. 2017-25, which proposes to increase the real property tax rate by 19 cents. If passed, the tax is expected to increase about 8 percent over FY 2018 and would generate $3.6 million in revenue.

If the average home costs $500,000, the proposal would mean a $95 annual increase in real property tax.

“Property taxes are already high, and the mayor is proposing to increase by 19 cents more,” Kagawa said. “That’s a last resort action.”

Kagawa said the proposed increase of real property tax stems from the Legislature’s cap of counties’ allocation of the transient accommodations tax.

It’s a sentiment Mel Rapozo, council chair, echoes.

“We as a county has to have the political will to tell the state we are not going to fund state services,” he said. “We’re not going to raise taxes to pay for their services.”

A public hearing on the measure will take place on May 10.

The council also passed Resolution No. 2017-29 which seeks a stricter definition of a balanced budget. The administration is proposing using the term, and striving for, a “structurally sound” budget.

A structurally balanced budget means that recurring expenditures, which are items found in the budget every year, like salaries, should be covered by recurring revenues, which are revenues that are expected to continue every year.

On Wednesday, the council also passed Bill No. 2645 and Bill No. 2646, which contain the operating budget and the $14.3 million CIP budget for the next fiscal year.

Starting today, the Budget and Finance Committee will hold departmental budget review meetings. The last review meeting will take place April 10.

The meetings, open to the public, start at 9 a.m. at the Historic County Building.


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