Mayor signs budget, raises questions over increase
Council says additional funding is warranted to support housing
Mayor Michael Victorino has signed the $843.5 million budget for the new fiscal year, though he raised questions over the increase in funding during the economic uncertainty of the pandemic.
“In the wake of the COVID19 pandemic, Mayor Victorino had submitted a more conservative budget on March 25 in light of the unknown impact of the pandemic on Maui County’s finances,” a news release from the Mayor's Office said Friday evening.
The budget passed by the Maui County Council on June 4 was higher than the mayor's original proposal of $829 million, though Council Chairwoman Alice Lee pointed out that part of the increase was because the certification of revenues shortly after the mayor's budget was released added $3.5 million.
Lee added that the budget increase was not for “luxury items or unnecessary items,” but for housing. The council's version added $8 million to the Affordable Housing Fund and $1 million to affordable rental housing programs.
“It's not like a frivolous expenditure,” Lee said. “It's money for an important need in the community.”
She said that the council was focused on increasing funds for infrastructure, which is essential for housing projects to move forward.
“If there's not enough sewer capacity, there's not enough water transmission, if the roads aren't up to date, then we can't have affordable housing. That precedes the homes,” she said. “So that's the reason why members wanted more money in the Affordable Housing Fund, not only for the construction of housing, but for the infrastructure.”
Council members also tried to keep homeowner taxes flat while raising additional funds through higher taxes on hotels and other visitor accommodations, Lee said.
While concerned about the bigger budget, Victorino also expressed support for housing and infrastructure. In his version, the mayor had proposed increasing the amount of real property tax revenues allocated to the Affordable Housing Fund from 3 to 4 percent, which the council supported.
“The additional revenue of $23,000,000 to the fund for FY 2022 will allow the administration to plan for muchneeded attainable housing for our working families and residents,” Victorino said in the news release. “In the spirit of collaboration and working together for the residents of our county, we will move forward in FY 2022 ready to support the future of our children, families and seniors.”
However, the mayor disagreed with the council's consolidation of line-item grants for the Office of Economic Development, saying that combining the grants “into one competitive 'pot' came without warning and caused uncertainty for many grantees.”
“Our grant management staff and the nonprofits were blindsided by this action, which caused unnecessary concern during this time of economic recovery,” he said.
Council Vice Chairwoman Keani Rawlins-Fernandez, who also chairs the Budget, Finance and Economic Development Committee, said that “the consolidation of line-item grants under OED will allow the administration increased flexibility to manage county grant funding, by removing strict guidance and conditions previously placed on the administration by the council.”
“With new opportunity breeds innovation and growth,” she said via email on Friday evening. “More of the same creates stagnation, and we desperately need to diversify now more than ever.”
Like Lee, Rawlins-Fernandez also pointed to the higher taxes on visitor accommodations as a reason for the budget increase.
“The biggest difference in the council-adopted budget was the $8M gained from taxes on the tourism industry allocated into the affordable housing fund to address our residents’ highest priority — increasing affordable and attainable housing,” she said.
Last year the council and mayor were forced to hammer out a budget at the beginning of a severe economic downturn. The council cut about $50 million from Victorino's original $869.8 million proposal and passed an $822.6 million budget that Victorino allowed to become law without his signature, saying he had concerns about rate increases for residential trash collection and landfill tipping fees, as well as the removal of some operational funds and two positions for the Central Maui Landfill Sunday green waste program.
Rawlins-Fernandez, who called it disheartening at the time, applauded the passage of this year's budget.
“It’s wonderful to have the council and mayor agree on the FY22 budget bill, which was diligently scrutinized by our hardworking council members and administration, to ensure that county resources, during the ongoing pandemic, are carefully applied to critical community needs to have the greatest and most beneficial impact,” she said.
The fiscal year 2022 budget goes into effect July 1.
On Friday, Victorino also announced that he was returning unsigned a bill that would raise pay for Office of Council Services staff, a decision that he said was “in no way directed at the quality of service of the employees of the Office of Council Services.”
“As a former council member, I know firsthand the time and effort these employees put in to assist the County Council,” Victorino said. “However, at a time when our economy is still recovering and so many residents remain unemployed, I question whether FY 2022 is an appropriate time for salary increases.”
He pointed out that five bargaining units have reached tentative agreements for no increase to their existing salary schedules July 1, 2021, to June 30, 2022.
While the union employees and appointed employees in the Mayor's Office “are making the sacrifice of going without salary increase for FY 2022, I cannot in good faith support this.”
“Since the tentative agreements contain reopener language specific to wages in the second year, I urge the County Council to delay their step movements for FY 2022,” Victorino said.
Lee and Rawlins-Fernandez said the raises were well deserved and would take up a small fraction of the budget.
“These raises are long overdue,” Lee said. “Unlike civil service workers, our employees are at-will. They have no job security, and honestly they work extremely hard, long hours and have no assurance that they will retain their jobs.”
Lee said the council wanted to bring the pay scales up to date, as some have been neglected for more than 10 years. She said the bill will go into law without the mayor's signature.
“Valuing a handful of longtime, hardworking employees through appreciation by way of modest salary increases that account for .005 percent of the budget, as opposed to pay freezes, is the best way to avoid costly turnovers, saving our county money and cultivating a healthier community,” Rawlins-Fernandez said.