After almost 12 hours of haggling over a volcano-torched budget, a contentious County Council session ended Wednesday night with the council unable to pass a spending plan.
The 2-7 vote means Mayor Harry Kim’s $518 million plan goes into effect, even though loss of property taxes from Puna lands consumed by lava leaves a crater of at least $5 million. The council’s action means property tax increases are extremely unlikely this year, as the charter requires property tax rates to be set by June 20 after a public hearing.
Only North Kona Councilwoman Karen Eoff and South Kona/Ka‘u Councilwoman Maile David voted in favor of the budget.
Finance Director Deanna Sako said the administration will await the council’s June 19 vote on a general excise tax increase before determining how best to balance the budget. Sako had presented lists of possible cuts, including a $5 million and a $7 million spending cut scenario.
“It’s all going to depend on what happens with the general excise tax,” Sako said Thursday.
Even the smaller list of cuts would entail noticeable reductions in county services, such as doing away with recycling programs, cutting county swimming pool hours to three days a week, suspending festivals such as the Cherry Blossom Festival and July 4 celebrations, and doing away with programs such as Summer Fun, fishing derbies and track and field.
The council faced the option of passing its annual budget with the $5 million hole in it, cutting services, furloughing employees or raising general excise taxes or property taxes.
Kohala Councilman Tim Richards pushed for a variety of cuts, but didn’t have the support of council colleagues.
“It’s my belief we have to cut the budget knowing that we will probably get reimbursed and with the reimbursements we will have more revenue going forward,” Richards said. “I think we have to make some pretty strong cuts to deal with this. I think that’s the direction we need to go.”
The budget adds $500,000 to grants for nonprofits, restoring the allocation to its previous level of $1.5 million. It also puts $270,000 into the council contingency fund, giving the nine council members $30,000 each to spread around their districts. This past year, they had $75,000 each.
The budget increases landfill tipping fees and housing grants to reach its new historic level, a 5.5 percent increase over last year. While no property tax increases are planned this year, the fuel tax will ratchet up by an additional 4 cents.
The council had voted 5-4 earlier Wednesday to pass a scaled-down general excise tax increase, with Puna Councilwomen Eileen O’Hara and Jen Ruggles, along with Kona Councilman Dru Kanuha and Hamakua Councilwoman Valerie Poindexter, voting no.
