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oJNVV or x+k+ <br /> w William G. Davis <br /> . Y6G2. <br /> <br /> Stephen K. Yamashiro ~ ~ Managing Director <br /> Mayor Henry Cho <br /> +j•• ~ Deputy Managing Director <br /> R+ OR•Na+t <br /> //~~rr „ ~ i ~ ~ ~ <br /> t1.Q1T2t~~J II~ ~M~tTtTi((T' , <br /> 25 Aupuni Strmq Room 215 Hilo, Hawaii 96720-4252 (808) 9df-82 C1 + Fax (808) 961.6543 <br /> KONA: 75-5706 Kuakini Highway, Suite I03 Kailua•Kone, Hawaii 96740 <br /> (808) 329.5226 Fax (808) 326.5663 <br /> May 15, 1998 <br /> The Honorable James Y. Arakaki, Council Chair <br /> and Council Members <br /> Hawaii County Council <br /> Hilo, Hawaii <br /> RE: Budget Proposals <br /> Enclosed is a schedule of recommended amendments to the <br /> Operating Budget for 1998-99. We have also included an <br /> analysis of the fiscal impact to the County of recent <br /> legislative actions. The recently concluded State <br /> Legislature approved the following proposals with fiscal <br /> impacts to the County: <br /> The Transient Accommodations Tax was increased from 6°•s <br /> to 7.25% with 44.8% of the collections being shared <br /> amongst the counties. <br /> The assumption for pay raises for retirement system <br /> purposes was reduced from 4% to 3%. <br /> Health Fund reserves were approved for rebate to the <br /> State and counties. <br /> Provisions for pay raises for collective bargaining <br /> Units 1, 2, 3, 4, and 13 were not provided for. <br /> The revised TAT rate and distribution will be effective on <br /> January 1, 1999, and will result in a revenue reduction of <br /> $2,876,397. Impacts relating to changes to the Employee <br /> Retirement System assumptions on pay raises and the rebate <br /> from the Health Fund reserves provide relief for fiscal <br /> year 1996-99; however, we have concerns for the fiscal <br /> year 1999-2000 when our analysis indicates that we may be <br /> facing a revenue shortfall of $9.8 million. <br /> .~:~r>At lia..~Y~__.. <br /> k"ke 2(a.._ ,j~jUl~ <br /> po: Presante ~ ~ <br /> ~ N 1 <br /> <br />