New Date For Mayor’s Volcano Talk-Story Meeting

Media Release:

Due to a scheduling conflict, Hawai’i County Mayor Billy Kenoi’s talk-story community meeting has been moved to Thursday, March 31 at 6:30 p.m. Mayor Kenoi and County department heads will meet the public at Cooper Center in Volcano Village as part of an on-going series of talk-story gatherings designed to address the specific concerns of each area. The Mayor and his Cabinet welcome direct questions from residents on any subject dealing with County services and issues.

Having recently released the proposed budget for fiscal year 2011-2012, the Kenoi administration will have copies of the budget message available.
The schedule for March is:

  • 3/08, Tuesday – 5:30 p.m. Na’alehu Elementary School Cafeteria (hosted by Ka’u Rural Health Community Association)
  • 3/16, Wednesday – 6:30 p.m. Keaukaha School Cafeteria (hosted by Keaukaha Community Association).
  • 3/30, Wednesday – 6:00 p.m. Papa’ikou Community Center (hosted by Pauka’a Community Association)
  • 3/31, Thursday – 6:30 p.m. Cooper Center , Volcano (hosted by Cooper Center)

Councilman Pete Hoffman – “Reflections on a Budget”

Commentary by Councilman Pete Hoffman:

The Mayor revealed his budget proposals for the coming fiscal year (2011-2012) this past week at a press conference with a delightful dash of fanfare and self-congratulatory remarks.  For the third year in a row, the overall County budget slid lower; from a high of $403M in 2008-2009, to the current proposal for the next FY of $366M, a decline of $37M over that three year period.  I view this new proposal from different perspectives.  The main themes could be stated as follows:  (1) “let’s kick the can further down the road”, (2) let’s remember there’s an election in 2012 and we shouldn’t disturb any voter, and (3) let’s not address the real issues as far as revenues/expenses are concerned.  Explanations follow.

For those who might remember, I had pleaded with the administration to delay a portion of the GASB-45 payments for the past three years in order to stretch our scarce budget resources.  This suggestion was met with less than enthusiastic fervor by the Mayor, his Finance staff, and my Council colleagues and was subject to some intense criticism.  I assume the Mayor has forgotten all those ‘nasty’ things he had to say about this previously, but now considers it to be a worthwhile concept.  Let’s be clear: what is proposed is a delay in making payments for future health benefit purposes.  It doesn’t damage any existing accounts, we won’t pay any penalties, and we can confidently look forward to repaying this amount when ‘good times’ return.  The County can do this once without suffering.  We’ve ‘kicked the can down the road’ a bit, finding a ‘bill-payer’ and achieving short-term objectives, knowing we’ll probably have to pay some, if not all, of the $20M later.   I don’t disagree, but wonder why the Mayor didn’t accept my recommendation last year instead of raising property tax rates?

And we also ‘kicked the can a little further’ by incorporating a bit of bookkeeping mayhem for the FY 11-12 budget.  At the moment, County employees get paid twice monthly, usually on the 15th and the last day of the month.  The new budget proposal simply alters the dates to the first and middle of the month.  This ‘lag’ pushes one payroll to the next FY in 2012-2013, and “saves” the upcoming budget approximately $6M.  This is a one-time adjustment.  It doesn’t ‘save’ anything, the County still pays everyone what is due them.  We simply throw one payroll into the next FY.  Most government entities have done already.  The Federal Government did it years ago.  It is a bookkeeping/accounting procedure, not an effective budgetary device.  I personally would have kept this option for more difficult budgetary times.  And finally, we’ve also decided to defer some debt service (interest payments) to the next FY as well, in order to shift $3M from the next budget.  Again we ‘save’ nothing.  We simply delay the inevitable.

In summary, the math is clear.  The Mayor has deferred about $29.1M in expenses in the coming FY, while reducing the overall budget total by only $9.78M.  The deferments still must be paid. Therefore, no matter how you slice it, County expenses actually will increase in FY 2011-2012 if you include those deferments in comparison to the current fiscal year.

Lest anyone forget, we have an election in 2012, and in reviewing the proposed budget, the Mayor has been careful not to alienate any large voter groups.  There are no property tax increases.  The budget restores 2% for Open Space Preservation, when the two previous budgets had nothing at all.  We still have subsidies for playing golf, so I assume this “important constituency” will be maintained at taxpayer expense.  In addition, no one has lost a County job and we have cut all furloughs (except for the Mayor’s staff), thereby eliminating possible adverse reactions from employees.   Of course, some are left to wonder whether we really have reduced County government to a practical and efficient size.

There are also few vacant funded positions remaining.  This most flagrant budget practice is almost completely eliminated, thereby channeling much needed resources into necessary services, instead of retaining funds in personnel accounts throughout the County administration.  Some may remember that the County budget once had as many as 480 vacant funded positions.  While progress has been made, I believe the tough economic conditions forced this change rather than the realization that good budgeting practices should prevail.

Finally, the really tough budget decisions remain for future resolution.  As noted many times previously, this County will never be able to properly address its revenue difficulties until we decide that a complete reform of the County’s property tax system be undertaken.  We will ‘never get well’ until we alter the practice of providing large corporate subsidies in the form of reduced property assessments and tax rates for businesses, not to mention our continued failure to impose any form of fair share costs on these enterprises.  While we can debate the extent of such changes, the need for some review should be of the highest priority for this administration.  Yes, it is a tough decision.  It probably won’t win universal approval, but again that’s what real leadership is all about.  We must begin to address a number of tough questions, and ‘kicking the can down road’ resolves nothing.

Pete Hoffman