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Home My WebLink About2018-01-19 Presentation to the Senate Committee on Ways and Means and the House of Representatives Committee on Finance Presentation to the Senate County of Hawai`i January 19, 2018 Committee on Financeand the House of Representatives Committee on Ways and Means Hawai‘i County Financial Position 2 Civil Defense, Planning, Public Works, Finance, Human Resources, etc.•Office of the Prosecuting Attorney•Fire Department•Police Department•General Fund includes:•In the last five years these costs have gone from 29% to the current 25%•Fundthe General Leaving only 25.4% of the budget allocated to all other cost of operations in •Debt service is 12.1% of budget•Salaries and wages, and benefits are 62.5% of budget•18) General Fund budget is $406,761,787-Current year (2017•Expenditures- Fiscal Year 2018 11%45,288,657 Other12%48,568,059 Health Fund12%46,272,526 Pension & Retirement12%49,129,513 Debt Service5%21,276,226 Culture & Recreation2%9,642,482 Health, Education & Welfare2%6,831,908 Mass Transit32%131,639,349 Public Safety12%48,113,067 General Government3$406,761,787 General Fund Budget– Uncontrollable 49,936,12210,854,16812,936,48710,295,74515,849,722TOTAL with EUTF11,000,0003,500,0003,500,0001,299,1412,700,859EUTF38,936,1227,354,1689,436,4878,996,60413,148,863TOTAL6,469,122815,1681 ,329,487946,915-5,271,382Debt Service8,967,000461,000-107,0005,948,8003,372,200OPEB23,500,0007,000,0008,000,0003,994,7194,505,281ERSTOTAL INCREASEFY2021FY2020FY2019FY2018Increase/Change170,789,253159 ,935,085146,998,598136,702,853120,853,131TOTAL with EUTF42,000,00038,500,00035,000,00033,700,85931,000,000EUTF128,789,253121,435,085111,998,598103,001,99489,853,131TOTAL50,327,25349,512,08548,182,598 49,129,51343,858,131Debt Service20,462,00020,923,00020,816,00014,867,20011,495,000OPEB58,000,00051,000,00043,000,00039,005,28134,500,000ERSFY2021FY2020FY2019FY2018FY2017(ERS, OPEB, Debt Service, EUTF)GENERAL FUND UNCONTROLLABLE INCREASES 4 increasessalary & wage collective bargaining unit include does notAmount •million$50 -years EUTF over 4 OPEB, debt service & increase of ERS, Total •Increases ERS and OPEB (GASB 45)ERS & OPEB as % of GFOPEB - GASB 45Budget ERS - GF% of General FundGeneral Fund ERS & OPEB 2019*201820172016201520142013201220112010200920082007200670,000,00060,000,00050,000,00 040,000,00030,000,00020,000,00010,000,000025.00%20.00%15.00%10.00%5.00%0.00%15.35%5.97%$63,816,000ERS & OPEB13,580,880$ERS & OPEB 5 from 5.97% in FY0615.35% of general fund in FY19 Total ERS and OPEB increasing to •100% of liability in FY19 increased to 80% in FY18 and to Hawai‘i County contribution •(2013)Act 268 -mandate Statutory Post Employee Benefits (OPEB) contribution for Other Employer • Hawai‘i County Financial Position 6 are generally restricted to specific grant purposesGrant revenues account for 7.6% of the General Fund revenue, but •6.1%–Licenses and permits, charges for services, and miscellaneous •5.0%–Previous year Fund Balance •4.3%–County portion of Transient Accommodations Tax •77.0% –Real Property Tax and Public Service Company Tax •derived from:18) General Fund expenditures is -Revenue to fund current year (2017•Revenues- FY 18 General Fund $25,140,415Other General Fund RevenueFY18 $20,234,681, Prev YrFund Balance, $17,298,000, TAT$30,838,930, RevenuesIntergovernmental $313,249,761, Taxes7 Total Revenues, $406,761,787100%Miscellaneous revenues1.9%Charges for Services2.0%Licenses & Permits2.2%(capped by Legislature)Transient accommodation tax 4.3%Previous year fund balance5.0%Intergovernmental Revenue (grants) 7.6%Taxes (Real Property Tax = 74.5%)77.0%Revenues: Real Property Tax 8 to balance the budget$20.8m in revenue which allowed us The increase provided an additional •cover revenue shortfalls for FY 2018rates increased to property tax Real •operating expenseswith increasing labor, benefits, and tax revenues are not keeping pace Expected increases in real property •CountyLargest source of revenue for the •General Fund TotalReal Property Tax Real Property Tax and Total General Fund Revenue 450,000,000 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 -70.0%69.5%69.0%68. 5%68.0%67.5%67.0%66.5%66.0% Real Property Tax 100.0%-$0$25Assessed value ≤ $500100.0%$50$2525,000≤ $Assessed value 100.0%$100$5050,000≤ $Assessed value 100.0%$150$7575,000≤ $Assessed value 100.0%$200$100Minimum Tax % IncreaseFY 2018FY 2017TaxMinimum 0.0%6.156.15Homeowner6.5%11.5510.85Conservation1.1%9.359.25Agricultural or Native Forest6.5%10.7010.05Industrial6.5%10.7010.05Commercial 6.5%11.5510.85Hotel & Resort7.8%11.7010.85Apartment0.0%6.156.15Affordable Rental Housing10.4%11.1010.05Residential% IncreaseFY 2018FY 2017 Building & LandTax Rate Per Thousand Net Taxable FY 2018 TAX INCREASE 9$500)≤properties valued at 100% minimum tax increase (except for •5% average tax rate increase•and affordable rental were increasedRates for all classes except homeowner •make up the revenue shortfallproperty tax rates were increased to Department budgets were cut and real •millionincrease resulted in a shortfall of $25 including ERS, EUTF, OPEB and 2% salary General Fund expenditure projections •Increase Hawai‘i County Financial Position 10 only $89,000.balance. This left a remaining unrestricted fund balance of rates and to commit $20,000,000 of the previous year fund the current year it was necessary to raise real property tax In order to fund the County’s General Fund operations for Fund Balance– Fund Balance Excess Fund Balance 201720162015201420132012 18,000,000.00 16,000,000.00 14,000,000.00 12,000,000.00 10,000,000.00 8,000,000.00 6,000,000.00 4,000,000.00 2,000,000.00 -11 Excess FB for 2017 was $89K•for fiscal year 2018 $20.2M was budgeted as revenue Of $20.3M ending FB in 2017, •eventsincreases due to unanticipated revenue shortfalls or expenditure Excess fund balance is a reserve for •following year’s budget Estimated FB is used to balance the •the fund balance (FB)Excess at the end of fiscal year is •88,925.3220173,271,870.26 20168,255,573.12 201510,641,254.85 201415,692,177.30 201314,773,951.86 2012BalanceExcess Fund Fiscal Year General Fund-Fund Balance Trend Hawai`iof County : Funding Concerns 12 other significant source of unrestricted revenue for the General FundThe portion of transient accommodations tax allotted to the County is the only •Hawai‘i County has only real property tax and public service company tax as •general operations, including public safetyHawai‘i County has very limited taxing authority to provide funds for unrestricted •to name a few–excise tax (GET), transient accommodations tax (TAT), use tax The State of Hawai‘i has tax revenue sources that include income tax, general • TAT HI County % of totalHi CountyState FY 2017-TAT Distribution FY 2003 600,000,000500,000,000400,000,000300,000,000200,000,000100,000,000050.00%45.00%40.00%35.00%30.00%25.00%20.00%15.00%10.00%5.00%0 .00%3.77%8.21%13 Legislature at $19.2MHawai‘i County’s share is set by the •counties at $103M Legislature capped distribution to •2004 compared to 3.77% in FY 2017TAT revenue collected by the State in FY Hawai‘i County received 8.21% of total •FY17from $181.8M in FY 2004 to $508.4M in for State increased 180%, revenue TAT •Hawai‘i Countyrevenue for largest source of Second •(Transient Accommodation Tax) Operational 14 propertiesrental Authorize County control over the permitting and enforcement of vacation •Fire Ants, Coqui Frog controlSupport State projects related to Rapid Ohia Death, Rat Lungworm disease, Little •Provide liability coverage for beach lifeguards•Maintain Department of Education funding under the State•of programs addressing their needsThe continued growth of the senior population emphasizes the need for support •Support of all programs related to and addressing the homeless•considerations:Hawai‘i County requests the following legislative Priorities Capital Project Priorities 15 Reconstruction Avenue Kalaniana`oleContinued funding for the State portion of •projectsconnectivity -innerPunaFunding support for •Puna130 in Funding support for continued widening and improvement of Highway •and infrastructurefor all services PunaThe County wishes to emphasize the extreme need in •district on this islandis the fastest growing district in the state and the most populated Puna•Hawai‘i County requests the following legislative considerations: The Honorable Senators Donovan M. 16 County of Hawai‘i Honorable Harry Kim, MayorThe Thank you for your interest and your continuing support Vice Chair, and members of the House Committee on FinanceThe Honorable Representatives Sylvia Luke, Chair and Ty J.K. Cullen, Ways and Means, Vice Chair, and members of the Senate Committee on Agaran-KeithCruz, Chair and Gilbert S.C. Dela