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Home My WebLink AboutCOM 0081.001 2018-2020Harry Kim Mayor February 04, 2019 County of Hawai `i Finance Department 25 Aupuni Street, Suite 2103 • Hilo, Hawaii 96720 (808)961-8234 9 Fax(808)961-8569 Deanna S. Sako Director Aaron Chung, Council Chair and Members of the,Hawai'i County Council Hawai' i County Council 25 Aupuni Street Hilo, Hawai'i 96720 Re: Bill 19, Relating to the General Excise and Use Tax Surcharge Please see attached copy of the presentation "Surcharge on General Excise Tax (GET)" for discussion on Bill No. 19 relating to the General Excise and Use Tax Surcharge. If there are any questions please do not hesitate to contact me at 961-8971. Thank you. /,4-�6 Pz-- Deanna Sako Director Ref. To:L Ref. Date F 8 Hawaii County is an Equal Opportunity Employer and Provider J f Surcharge on General Excise Tax (GET) County of Hawaii Bill No. 19 Overview of the current GET Surcharge • GET surcharge of one-fourth percent (0.25%) • Estimated income of $25 million per year for transportation related costs • Visitors to pay aprox. 25 — 35% given current dec ine in visitor count/spending • Visitors would contribute to transportation infrastructure • Sunsets December 31, 2020 0 0.25% Covers Transportation Needs Mass Transit • New buses • Modernized system • Increased responsiveness Road Improvements • Backlog of repair and road projects • Reduced Federal Highway funds • Traffic congestion Trails • Demand for improvement and accessibility Current Taxes under our Control... • Real Property Tax • Fuel Tax — (specific to Highway Fund) • Motor Vehicle Weight Tax — (specific to Highway Fund) • GET Surcharge up to 0.5% (only for transportation) The County has no other taxing authority to cover General Fund operations. Opportunity: Expand and Diversify Income: Increase to 0.5% • GET surcharge of one-half percent (0.5%) • Estimated income of $25 million per year for transportation related costs and if we gain flexibility in spending, another $25 million for other essential needs • Visitors to pay approx. 25 — 35% given current decline in visitor count/spending • Visitors would contribute to transportation infrastructure and if we gain flexibility in spending, to other needs such as improvements in public safety The County Still Has Unmet Needs v� • Uncontrollable (by County) Increases • Employee retirement benefit payment increases (ERS, OPEB) • Employee health benefit payment increases (EUTF) • Bargaining Unit increases A OX00% It 4 10 G- oar ColiertiVA The County Still Has Unmet Needs Community Needs • Address the homeless crisis • Address the increasing issue of squatters • Improve Maintenance of Parks and Recreation facilities North Kohal "Waft. tit�d G.,e,.F. waimea P" Kohala Coa �.M gaK��l� Fis�A�l,fr} Kailua- Kona..... VAM1�k �1A♦M 7C4"M CA),. "'rte..• PVilr�y691rMrw �rMArrr� MRIMMfM � •.. •• lMwM r- •1• away a cosec , 4 rtnrAt. frr�* /r+ a1r ►ys wog, AAAU*A .» Hilo Ate, . AMn Aw°" 4r 'IrO"Waft -a-tw M wUN. Y�elA�11% wvea+o MW r� ��"4 �fbiAE The County Still Has Unmet Needs Public Safety: Police — Fire — Civil Defense • More police presence • Increased responsiveness • Body cams for police officers • Replace aging fire apparatus • Aging police fleet • Technology upgrades for public safety -J- The County Still Has Unmet Needs Other Needs: • IT infrastructure (closed-loop connectivity to prevent large scale outage due to single location failure) • Personnel required to staff and monitor building permit process • Enforcement of Bill 108 (Short-term vacation rentals) GET Bills at the 2019 Legislative Session • HB 198 Maui County's bill to request GET and allow spending on affordable housing and homeless projects • HB 183 Hawaii County's request to allow flexibility on up to 50% of the total proceeds received • HB 429 Hawaii County's request to allow flexibility on up to 50% of the total proceeds received • HB 1394 Joint request from Kauai and Hawaii counties that allow some GET monies to be spent on infrastructure and public safety This Photo by Unknown Author is licensed under CC BY -SA Impact of a quarter % increase • If you spend $100 on a bag of groceries your bill will increase by 26C • Y4% impact on annual expenses - $20,000 annual exp - $50/yr (96G/wk) - $50,000 annual exp - $125/yr ($2.40/wk) • Eligible food purchases under federal food assistance program are exempt from GET (SNAP, WIC) • Prescription drugs and prosthetic devices are also exempt from GET Education 3% Health Care 8% Fooc 14% Total Average Annual Household Expenditures, $44,727 Other Transportation 16% Housing 41% Annual Budget npact of Surcharge, $224 Daily Budget Impact of Surcharge, $0.61 Recap of Benefits to the Community... • Estimated to generate $50 million per year • Additional 0.25% would be effective January 1,, 2020 • Would generate an additional $12.5 million in FY202O • Opportunity for visitors to support local government • Will diversify county revenues • Other income generating options such as increasing Real Property Tax rates and fees for services have potentially greater impact to residents ow MAHALO.1 13