After months of talking stink about a general excise tax increase, Mayor Harry Kim on Tuesday asked the County Council to approve it.
“I support this because of a limited choice,” Kim told the council Finance Committee. “I have no other choice except this on the table.”
The committee liked the tax hike even less, voting 3-6 to forward Bill 102 with a negative recommendation to the council for the first of two required hearings. The state law giving the county permission to raise the tax requires a public hearing as well.
The bill puts a one-half percent local surcharge — a half-penny on the dollar — on the state GET, which is 4 percent. The county has until March 31 to approve the tax, under the state law.
In a discussion that stretched more than five hours, council members chafed at the short time line they had to explain the need for more revenues and get input from constituents.
Council Chairwoman Valerie Poindexter said her constituents are upset. She said news of across-the-board raises for rank-and-file staff and top officials didn’t improve their mood.
“Here is the government, here is the beast, and we keep feeding the beast. How do we start living within our means?” she asked. “We raised the fuel tax, we said we’re gonna do this, we’re gonna do that, and people haven’t seen anything. … This is so unfair to the people.”
Hilo council members Aaron Chung and Sue Lee Loy and Puna Councilwoman Eileen O’Hara favored the tax as a way to diversify the county’s revenue sources and put some of the tax burden on tourists.
Kim said he looked more favorably on a half-percent GET surcharge after learning from the state that tourists would pay anywhere from 30 to 40 percent, or maybe even more, of the tax. Adding the surcharge would raise about $25 million annually, he said.
If approved after the public hearing and two council hearings, the tax hike would go into effect Jan. 1 and continue until it automatically expires Dec. 31, 2030.
Depending on the final property evaluations underway, the county is about $8 million short as it puts together a budget that’s due to the council March 1. Without the GET increase or some other revenue source, the county will have to cut services, said Finance Director Deanna Sako.
“We have cut our costs, we have trimmed our budgets, we have asked our departments to make do with less,” Sako said.
The GET surcharge can be used only for operating or capital costs for public transportation systems, including public roadways or highways, public buses, trains, ferries, pedestrian paths or sidewalks or bicycle paths.
But because the county pays for some of those projects partially through its general fund — paid by property taxes — the extra money could free up money in the general fund for other expenses.
Other council members wanted to see a list of projects that would be paid for with the new money.
“This council said loud and clear, we’re not going to give blank checks,” said Kona Councilman Dru Kanuha. “It’s hard for me to give one vote for a blank check right now.”
Kohala Councilman Tim Richards unsuccessfully proposed an amendment reducing the fuel tax and property taxes the council raised last year by at least 10 percent. That would result in a net status quo of tax revenue, but from different sources.
“I think they would support an increase if there was a decrease somewhere else,” Richards said.
The committee unanimously approved an amendment by O’Hara recommending any money saved from the general fund go for enhanced police protection.
At least one council member would rather see the property tax hikes than a GET surcharge.
“The more equitable way to raise funds would be to tax those who can most afford it,” said Puna Councilwoman Jen Ruggles, who targeted hotels and resorts, second homes and businesses as possible revenue sources through higher property taxes. “We do have a lot of wealth on this island and we need to be taxing those who can afford it.”
About 30 people sent in written testimony, the majority of it letters praising the increase as a way to promote “Complete Streets, Safe Routes to School and other improvements that would support active transportation options, such as walking and biking,” many of the letters said. Three testifiers said they’d support it if food, medical services and drugs were exempted.
All of that boils down to, “We gotta do this, we gotta do this, but no money,” said Carol Ignacio, representing the Blue Zones Project.
Several of the four people testifying in person in support of the tax pointed to the need to fix the county’s struggling Hele-On bus system.
“The bottom line is, we will all survive a half-percent increase with very little notice,” said Patti Pinto.
Pahoa resident James Weatherford said the new money should require “extraordinary oversight” from officials. He said the county needs to fix the bus system.
“What we call Hele-On has been an abject failure,” Weatherford said.
Hilo Realtor Mary Begier said she still had a lot of questions she hoped the administration could answer. It all boils down to trust, she said. She noted the 2030 sunset date in the bill, asking if the tax increase would actually expire then.
“Can you show me a temporary tax?” Begier asked. “Is there any tax we ever turn off?”
Three people sent in written testimony opposing the increase and one spoke against it.
“We just had two tax increases this past year,” said Michael Wilson of Captain Cook. “The cost of living is already very high. … That’s like increasing the cost of living a half percent.”
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.
When’s the last time our local govmnt took LESS out of every ones pocket ?
Never.
& it never will.
It ain’t your money, it’s their money, and you should be grateful they let you keep any of it.
Ever.
What goes up and never comes down in this County?
Your age, and taxes.
Poor Harry can’t remember if he’s supporting TMT, GET, TAT, or GT…One word he knows all too well, RAISE. Do us all a favor and leave Harry, and take all your lazy once or twice retired appointed staff with you! Notice how Sako sits there and calmly states we have no money when she testified in front of the Salary Commission that there was more than enough funds to give herself, the Mayor and all his pals an enormous raise?
I guess this is a way for Harry to get rid of counsel members next election.
This tax increase is actually due to the cowardice of our state government elected officials. Once they stole huge portions of the TAT they then refused to give it back. Then they generously “gave” the counties the power to increase revenue through GET. They just did it to pass the buck so they wouldn’t have to be the ones to raise taxes, they just put the burden back on the county level politicians. All these people care about is getting re-elected. “Politician” was never meant to be a career. But here we are, corruption at every level of government.
Demo rats can not handle the truth because they are all liars. Thank you for telling the truth. God Bless the home of the brave.
What a bunch of phonies. Kim and the council will go through the charade of pretending they don’t want the tax, but ultimately they will pass the tax. We knew it would play out like this as soon as the State authorized them to impose the tax. They all need to go.
they could forgo pay raises
Not Harry ever! Its all about money and retirement for him and his staff. You won’t find one of them that got those enormous raises say they’ll stay at the rate of pay they agreed to take when they got appointed last year.
….or we could eliminate the salary commission ….they’re all hacks
To ask the bandits to voluntarily return their ill gotten gains is delusional.
Come on folks.
With Trumps new tax plan, you will still have more money even with the GET increase!!
Learn proper economics folks!!!
As Trump says “we will all be rich!”
….and these are the people we voted into office.
There is no other way. Lying Harry and the Council Bandits have to go!
Harry you always have choices you the mayor. At least your consistent with raising everything from taxes to admininistration raises with nothing to show.
This is just nuts! Mr. Kim ya did well on missile day but property taxes up!!! now GET TAX??? wow. Maybe u should have tax dept. look @ who has not paid taxes such as land or past due GET tax. YOU ALL NEED TO GIVE BACK YOUR RAISES TOO!!! Kim no vote, Valerie…see ya… go after RENTALS…..
What Harry, the Finance Director and a couple council members see is that if they don’t plan for an increase in revenue, the County could go bankrupt! There are unfunded liabilities that the recent fuel and property tax increases are not able to cover!! Its a shitty situation but if they dont figure out a new revenue source, they will be forced to cut costs! Maybe some of you dont give a shit, but that means work furloughs, less services, overall decrease in quality of life. What Harry and the Council have to come up with is a clear plan that we citizens can get behind. They not going please everyone, but right now this is not pleasing anyone. Unfortunately the current administration and council leadership lacks the ability to come up with a plan, but they awesome at grandstanding! Time for a change.