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REPORT OF THE <br /> COMMITTEE ON FINANCE <br /> DATE: February 4, 2019 Re: Comm. No. 81/Bill No. 19 <br /> PLACE: Council Chambers <br /> Hilo, Hawai`i <br /> TIME: 10:15 a.m. <br /> Council Chair and Members <br /> Hawai`i County Council <br /> Hilo, Hawai`i 96720 <br /> Your Committee on Finance, to which was referred Bill No. 19, reports as follows: <br /> Bill No. 19, transmitted by Finance Director Deanna Sako, via Communication No. 81 dated <br /> January 16, 2019, amends Chapter 2, Article 45 of the Hawai`i County Code 1983 (2016 Edition, as <br /> amended), relating to the General Excise and Use Tax Surcharge. <br /> This bill increases the general excise and use surcharge from one-quarter percent to one-half percent <br /> beginning January 1, 2020, and amends the sunset date of December 31, 2020, to December 31, 2030. <br /> Mayor Harry Kim stated that not being able to tap into the full one-half percent of the County's option <br /> on the General Excise Tax (GET) would mean a hike in the real property tax. What is being presented is <br /> an alternative to raising real property taxes. <br /> Council Member Herbert M. "Tim" Richards, III stated he is not convinced the County has done all it <br /> can to manage costs and he needs numbers before approving any more taxes. He also stated that unless <br /> he knows what the budget is,he will not support any tax increases. Mr. Richards also commented that <br /> the County needs to diversify the revenue stream. <br /> Several Council Members stated their position on raising taxes as well as questioned the reasons why <br /> it is necessary to have to raise taxes. Ms. Sako responded that if the GET is not raised, the only other <br /> source would be is to raise the real property taxes since that is the only source that would go to the <br /> General Fund. All the other sources are restricted to transportation, i.e. motor vehicle and fuel taxes go <br /> towards transportation. <br /> Committee Chair Maile David asked Ms. Sako why the only alternative would be to raise real <br /> property taxes. Ms. Sako reiterated that the alternatives are to raise property taxes and reduce services. <br /> Ms. David stated that raising real property taxes would impact property owners, whereas the quarter <br /> percent proposed GET increase applies to a broader base, and noted that the County has little control <br /> over collective bargaining negotiations, which increases the County's budget. <br /> FC Report No. 14 <br />