Finance director doesn’t support property tax forbearance

County Finance Director Scott Teruya said Friday that while Mayor Michael Victorino’s administration has not talked about forbearance for property taxes due to largescale unemployment caused by the coronavirus pandemic, he would not recommend it.

Saying he cannot speak on behalf of the mayor, Teruya told the County Council Economic Development and Budget Committee that “my recommendation would be no” to efforts to allow property owners a break in paying property taxes. “I don’t think that is in the best interest of the county.”

He noted that the county has bills to pay and that the county’s bond status could be affected detrimentally.

Teruya appeared before the committee to announce the certified net taxable valuation for county properties — the basis for the establishment of property tax rates and revenues. The valuation plus the tax rates determine revenues from the county’s main source of funding.

The total property valuation for 2020-21 is $54.8 billion, a 7 percent increase from the previous fiscal year, the Finance Department report said.

Employing the mayor’s proposed tax rates, $370.3 million in revenues would be generated for the next fiscal year, which runs from July 1 to June 30, 2021.

This total is about $5 million less than estimated when the mayor released his $869.8 million budget on March 25. Teruya explained that an estimate is formulated so that the mayor can produce his proposed budget. Usually the Finance Department is close on its estimates, but due to appeals, the certified amount was $5 million less.

The number of appeals was down from the previous fiscal year to 1,096 (there were 1,360 appeals in 2019-20), but the net taxable value was higher, he said.

While the mayor has established his proposed property tax rates — which includes a 10 percent reduction in rates for owner-occupied dwellings and a 15 percent reduction in the hotel rate — the council will establish final rates.

In other county financial news, Victorino sent a letter Friday to budget Chairwoman Keani Rawlins-Fernandez explaining that his administration is taking measures to deal with the coronavirus impacts in the current budget year. This includes freezing all vacant positions with exemptions for first responders and essential services, such as wastewater and solid waste workers.

Department heads also have been asked to reevaluate purchases for equipment and to minimize operational costs where possible.

Victorino told The Maui News on Thursday that he does not plan to furlough county workers.

The mayor said he developed his proposed budget for next fiscal year “prior to the pandemic and based on the limited information available at that time.”

“As the pandemic continues, so does the uncertainty of Maui County’s economy,” he said.

Department heads were asked to look for ways to reduce up to 10 percent of their costs by reviewing their proposed budgets and prioritizing their needs, the mayor said.

“I understand that reductions are inevitable, but I humbly ask that the EDB Committee take into serious consideration the recommendations provided by each department,” the mayor said. “They have made the recommendations based on their knowledge of their operational function and capacity to fulfill their duties.”