HomeMy WebLinkAboutCOM 0091.028 2016-2018 PlOPterAL
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Murashige, Laura COI.M•0 i
From: fred Housel <fred@kieleokona.com>
Sent: Tuesday, May 16, 2017 10:38 AM
To: Council Testimony
Subject: Testimony For May 18 County Council Budget Meeting
Attachments: F. Housel Testimony Council Mtg 5 18 17.pdf
Attached is my testimony regarding the Hawaii County proposed 2017-2018 Operating budget
to be held on May 18,2017.
I will be present in Kona to present my testimony on May 18.
Thanks,
Fred Housel
*:
1.3
Comm. No. Cto
Ref. To: CAIA-
Ref. Date Billing--
1
M ling -
1
The High. Cost Of Hawaii County Government
Fred House' May, 2017
Why has the cost of Hawaii County government increased at a rate of
more than 3 times the rate of population growth since 2000?
While the population of Hawaii Island has increased by 35% from 2000
to 2017,. the Hawaii County Operating budget has ballooned by 179%.
At a campaign forum in Kona last year, Mr. Kim strongly criticized
Mayor Kenoi's budget for 2016 as "bloated and out of control" (which
he would correct if elected).
Mayor Kim now wants to increase that "bloated and out of control"
budget by 29. million dollars for 2017-2018.
Please refer to the attached spreadsheet A for details.
In January 2017, Mayor Kim stated there would be no increase in real
property tax rates this year.
In February, he said there may be real"property tax rate increases.
In March, Mayor Kim said there be increases in real property tax
rates for 2017-2018.
In May, Mayor Kim announced there would be across the board real
property tax rate increases of 6.5% for all property classes except
affordable rental.
With this rate increase, there have been four rate increases from 2008.
Tax rates have increased up to 50% depending on the real property
class.
Hawaii County already has the highest property tax rates in all
property classes except 3 in the a State! See attached chart B
Four property tax rate increases in eight years have put an immense
burden .on low and fixed income taxpayers, especially in West Hawaii
where property values are double the values in East Hawaii.
Mayor Kim stated that the reason for the tax rate increase was to pay
for the increases in employee wage compensation due to union
contracts and the shortfall of the TAT revenue, however he then
added approximately 10 million dollars for additional expenses
including 13 new positions(up from 6 in the Draft 1 budget).
Referring to the spreadsheet, the average cost per county employee
(wages, health insurance and pension) has increased by 55% from
2005 to 2017. The 2017 average cost per employee is $113, 675.
Thesenumbers were calculated by taking 70% of the. Operating
budget and dividing by the number of permanent employees.
Temporary positions were not included because it could not be
determined if these are grant funded or county funded.
The 6.1% increase in the proposed Operating budget isgreater than
the average annual real property appreciation rate.
If this increase is approved this year, how is the County going. to pay
for next year's budget? Another tax rate increase?
The proposed increase of 13 new positions brings a concerning issue
to mind:
During Mayor Kim's second term in 2005 to 2008, he increased the
Operating budget by 42% and created 326 new positions.
The sub prime interest recession struck in late 2008, mandating very
painful major layoffs and furloughs for all county employees.
There is no question if another recession will happen, only when.
Is Hawaii County prepared for the next. recession?
Current economic cycles are about g to 12 years long.
Although times are reasonably good now., we are now in the ninth.
year of this economic cycle.
At current record spending levels, Hawaii County is at severe risk of
having another economic disaster such as the one that occurred in
2008..
Hawaii County must take immediate cost reduction actions to reduce
this risk..
Recommendations.:
As the largest component of the Operating budget is employee costs,
serious action must be takento reduce these costs.
Immediately institute a hiring freeze on all new positions and unfund
all vacant positions.
Closely evaluate all other Operating budget items to find cost
savings.
You, County Council Members, control the purse strings and thus are
responsible for restoring economic responsibility and tax payer'well-
being to Hawaii County government,
Thank you
Hawaii County Cost Of Government HistOryi I Spreadsheet A F ••
:
.
Cost Cf a Erp ce
NunierCf Co:.
Hawaii Co. of0. Operatingf. Government.Per 1 Com ensation(70Iof 1 Em to ees(Perm
Cost Per Co.
•
Year : Population Increase Budget Increase ; Resident, Operating Exp•:) ' Full&Part Only) Employee
2000. 1. 149,.000 ... $176,000;000 $1,181 21 $123,200,000' c
•
2001151;690 1.81% $1'96,000,000 11.36%0 $1,292 11 37,200,000
2002 . .._ . 154°,576. . 1:90%. $205,000,000 4.59% , !$1,326.21................ $143,500,000
2003 = 156,442 2.50°%•. _ $221,00.0,000 7:80%0 $'1,394,83 $154,700,000.
2.781n $246,000,000 i` $'1,510,57 $172,200,000
2004 162,852 ° 11..31 No .
•
• 2005 168,237 3,31% $284,000,000 15A5%0 $1,688 09 $198',800,00U 2,710 • $73,357-.93
2006 173,5:36 3.1;5%. $327,000,000 15.14% $1,884 34 $228,900,000 2,612 $87,634.00
2007 177,733 $375,000 000 $2,1:09.9`1: $262,500,0.00 2,856 $91,911 76
. .. . 1''4 6$°l0
•
• 2008 181,506 2.1.2% $403,000,000: 7.47%0. $2,220_:;31 $2.82,100,000' 2,:933: $90,017 7Q
1:17%Q = $387 000 000 3.97%0 ,900,00.0•= 2.9•11 $93 060 80
2009 8.3,629 - $2,1071 $270
201.0 185,:079 0:79°l0> : $:376,000 00.0 -2*84% 1 $2,031.56 $263:,200,000 i 2,920 $90,136:99
• '' 20:11 186°933 1.:00% i' $367,'00Q 000 2:93%0 ': $2,070.26. $270,900,.000: 2,916 $92,901 23
•
2'012. 1,88'765 < 0.98%0.: . $382,000,000. -1.29% [ $2.,023.68 $267,400,000 2,915 $91,732 42
1.2610 ' $394,000,000 3.14%0 $2,061-.24 $275,800,000 2,946 $93,618A7
2013 191;147 °
201'4 193,156 1.415°l0 $417,.40.0;000 5.84% $2,1'60 62 $291,900,000 2,949 $98,982.71
2'0 1.55.%.
15 198;150 1 $438,793,000 5:23%0 $2,273.54 '. $307,155,100 3,008 $1.02,112 .3
_
2016 I.. 1.98,449 1.17%0 $462,979,000: 5.51%o $2,398.85 $324,085,300 3,007 $107,770.95
•
2017 1
201,000 1.29% $491,242,000 6.1:0:/0 _
$2,545 30 $343869;4Q0 3,025 $1:13,675.83
Annual Average; 1.81 Annual Average; 6 40%
i lr\moi�1if.\ ��I lffi�i r��li i' f �■I AR'�il.i 11* t�VlI1. ■ tM M�f^ �i'■ri• Y ■moi'
Tax Rates per$1,000 at 1.00% Market Value
•
Hi Co. Percent
•
•
Increase(comp
•
Class Hawaii i Honolulu i Maui I Kauai 1 with Honolulu)
•
Residential
.
Building............_...........................................: $10 05 $0 00 .$5.30.. $6 05 6
Land $10 05 $6 00 $5 30 $605 68%
Commercial Residential
Building....................................... nia...:... 1 $6..00 435: $5;.:05:..,. I nia......
Land • • _n1 $3 00 $4 3 • $:5:..05 1 ilia
Apartment
Building1085 I $8.50: $6.00, $7..:05 8(
-Landt.
$10.85 . ...._ $8.50 $000...., ....... $7.05 28
'Hotel/Resort
!Building 10 85 .....I '$1290....... $8:.71......:. . ..... $10,65 .1 -154'0 .
;Land $10.$5 . _: ._$12...90 $8.71 ` .$.10,.. 50 ..,,, _._ '
orrrner+ •
Building $10 05 $12.,4::0 $6► 00 .$8..10.
8 10 - • c,.Y•
Land ....__, $1025i .
$12 0 $fi 6Q $8 10
Industrial ,
Building ....................... $'10 05 $12.40 $6,69 $8,10 rA
Land $10.05.. i..... $1.:2..40 $6 6 :.... .._:......_ .__...$8.10. .: {�9� `_
Agricultural_._........ . ....w.
Building..: ... .: ... $9.25 ` $5.70 ....... $500.,.... $6.75 62
.Land ...........$0...75. :.. 1.... ..:_.::_....:..._: 1.
.....$9.25 i..:...........$5 70.... � ..... $'� 50.......
•Conservation • ••
Building_.... 10 85.. . : nil !i. $5 8( ,.. $570 M
n ,. ..
Land $10 85 n/a $5 80 $5.70 � a
Homeowner
:Building:... $6,-1.5 $3.50 1, $2.70 $3 05 1 76
Land
Affordable Rental Housing
Building $6:15 ; nil n/a :nia
Land $6,15 n/a n/a• n/a
Vacation Rental
Building $8 85
Land 1 $8 8•5
Time Share
Building $44,3:1
Land . $14,31
Inflation and Social Security Rats History. { spreadsheet
} Consumer • 1 Hawaii County
Price Index Social Security Employee Raise
Year 1 Increase COLA Ad`. ....... Hto % Increase
2000 ' 3.4%v 3,5% 4.0
°f°
2013
2001 2.3%a 2.6% 4 Q%
2014
, 2t
2002 1.6% 1.4°fo
15 •
4.0%
2003 I. 2.3% - 2.1% 2C 16 4.0%
2004 2.7% 2.7°0
•
•
2U 17 225%
°
2010 3.4% •
•
41
2C1 2-0%
2006 3.2°Io 3. °/o
Tc. tal 20.25%
2007 Average Annual Increases 3.38%
1.• { :
20.08 3.8%0 5.8%
i ;
20 -0. ° 0 0%
2010 1.6%v 0.0%
2.01`1 F; 3.2% _ 3 6% •
2012 2.1% 7%
1
... ..:. ....... ..
2013 _ 1°.5% 15%
2014 ._ 1.6% 1 7%
2015 1 0,1% 0%0%
20 16 1:,3% 0 3%
Average 2,2°0
Average 2.2%.
2012-16
•
Avg . %
'I.0%
•
County workers, in Hawaii among nation's best paid
Tuesday, January 31st 2017, 1 :44 pm HSTTuesday, January 31st 2017,
7:56 pm HST
By HNN Staff
HONOLULU (HawaiiNewsNow)
New data released on Tuesday reveals county workers in Hawaii make the
highest average wages in :the nation, compared to employees from
counties in other states.
The Grassroots Institute of Hawaii examined statistics from the U.-S.
Bureau of Economic Analysis, which showed that county workers
across the state's four counties made, on average, roughly $61,365 per
year,
The total was listed .as more than. $12,000 per year higher than the national
average of $48,053 per county employee.
When adjusted for Hawaii's high cost of living, the report says, county
employees in Hawaii are still the sixth-highest paid in the country, which
remains about the national. average,
There are just under 20,000 people in Hawaii who are employed by one of
the state's four counties, the report says. State employees, a group which
numbers close to 75,000, were paid an average wage of $46,319, less than
the national average of $5O,656.
Copyright 2017 HaWaii News Now. All rights reserved.