HomeMy WebLinkAboutREP FC 014 2019/01/08 2018-2020 REPORT OF THE
COMMITTEE ON FINANCE
DATE: February 4, 2019 Re: Comm. No. 81/Bill No. 19
PLACE: Council Chambers
Hilo, Hawai`i
TIME: 10:15 a.m.
Council Chair and Members
Hawai`i County Council
Hilo, Hawai`i 96720
Your Committee on Finance, to which was referred Bill No. 19, reports as follows:
Bill No. 19, transmitted by Finance Director Deanna Sako, via Communication No. 81 dated
January 16, 2019, amends Chapter 2, Article 45 of the Hawai`i County Code 1983 (2016 Edition, as
amended), relating to the General Excise and Use Tax Surcharge.
This bill increases the general excise and use surcharge from one-quarter percent to one-half percent
beginning January 1, 2020, and amends the sunset date of December 31, 2020, to December 31, 2030.
Mayor Harry Kim stated that not being able to tap into the full one-half percent of the County's option
on the General Excise Tax (GET) would mean a hike in the real property tax. What is being presented is
an alternative to raising real property taxes.
Council Member Herbert M. "Tim" Richards, III stated he is not convinced the County has done all it
can to manage costs and he needs numbers before approving any more taxes. He also stated that unless
he knows what the budget is,he will not support any tax increases. Mr. Richards also commented that
the County needs to diversify the revenue stream.
Several Council Members stated their position on raising taxes as well as questioned the reasons why
it is necessary to have to raise taxes. Ms. Sako responded that if the GET is not raised, the only other
source would be is to raise the real property taxes since that is the only source that would go to the
General Fund. All the other sources are restricted to transportation, i.e. motor vehicle and fuel taxes go
towards transportation.
Committee Chair Maile David asked Ms. Sako why the only alternative would be to raise real
property taxes. Ms. Sako reiterated that the alternatives are to raise property taxes and reduce services.
Ms. David stated that raising real property taxes would impact property owners, whereas the quarter
percent proposed GET increase applies to a broader base, and noted that the County has little control
over collective bargaining negotiations, which increases the County's budget.
FC Report No. 14
FC-14 Page 2 February 4, 2019
Ms. David stated her hope is that there would come a time when a balanced budget is presented to the
Council that would not require increase in taxes.
Your Committee on Finance is in accord with the purpose and intent of Bill No. 19, and recommends its
passage on first reading.
dmm
AYES NOES ABS EX Respectfully submitted,
CHUNG X
DAVID x COMMITTEE ON FINANCE
EOFF X
KANEALPI-KLEINFELDER X
KIERKIEWICZ X = rIP
LEE LOY X `_i►
POINDEXTER X MAILE MED IROS DAVID, CHAIR
RICHARDS x FC REPORT NO.: 14
VILLEGAS x ADOPTED: FEB 2 0 2019