LIHU‘E — The ramifications of the coronavirus pandemic have tightened the belt of the county government, and it will be reflected in the fiscal year 2021 budget as revenue streams remain uncertain.
On Friday, Mayor Derek Kawakami submitted a supplemental budget that showed a $10 million reduction in the proposed operating budget, to stand at $250,777,323, and a $33,642,237 capital improvement projects budget.
“While some budgetary presumptions are clearer, others are not, as we fully submit this supplementary budget proposal as a best-guess given present conditions,” Kawakami wrote in a memo to the Kaua‘i County Council.
“As the administration made every effort to limit the amount of adjustments between the March and May budget submittals, we freely recognize some profound changes reflect and are predominantly necessitated by the issues related to COVID-19 response and an anticipated lengthy recovery,” Kawakami said.
In the document submitted in March, the administration proposed an operating budget of $261.1 million and CIP budget of $34.4 million.
Even then, these proposals noted the uncertainty of impacts COVID-19 will have on the county.
“During the development of this budget submittal over the past few months, the revenue picture was very clear,” Kawakami wrote in a March 13 memo. “However, we fully recognize this presumption is no longer the case. For example, on March 11th, the state Council on Revenues changed its revenue forecast to a flat trend, indicating items like the Transient Accommodations Tax (TAT) and General Excise Tax (GET) county surcharge revenues are ever-changing.”
The county additionally anticipates the GET fund to be reduced by about $6.6 million.
A review of the supplemental budget confirmed that much of the cuts were directed on travel, trips to conferences, trainings, a hiring freeze and vehicle purchases save for critical requests for solid waste. The hiring freeze will also reduce some full-time positions to six-month, contracted jobs.
Expenditures for these items have been cut about 50% for the General Fund and 44% overall, according to the memo.
The Life’s Choices program will move from the Housing Agency to the Office of the Prosecutor, “to align juvenile-justice opportunities with diversion emphasis,” according to the memo from Kawakami. Two program specialists will move over to the office, one being fully funded.
In the March submittal, there were new revenue streams projected, including fee increases and fee adjustments at Wailua Golf Course and the Kekaha landfill, some of that revenue to be used to fund a wastewater rate study. These have now been eliminated. The supplementary budget includes an increased tax rate for about 380 high-value, residential investor properties, which adds $2.3 million in revenue to be used in the housing revolving fund for houseless and affordable-housing initiatives.
The Kaua‘i County Council will hold a special meeting and FY20-21 budget decision-making session at 9 a.m. on Friday, May 15. Webcast meetings can be watched at kauai.gov/Webcast-Meetings. A public hearing will be held Wednesday, May 13 at 5 p.m.
Correction: This article was updated Tuesday, May 12 at 9:45 a.m. to update when the FY20-21 budget decision-making session would be on Friday, May 15, not Wednesday, May 13 as previously stated.