Maui officials see
budget losses ahead

Lingle alerts the Council to
her projections placing Maui in the
same fiscal squeeze as Oahu

By Gary Kubota
Star-Bulletin

WAILUKU -- Maui Mayor Linda Lingle has warned the County Council to brace for larger revenue losses as a result of the state reducing the counties' share of the hotel room tax.

Lingle anticipates that, while the loss for fiscal 1998-99 will be $1.9 million, the reduction will reach $9 million by the year 2000.

Her administration plans to meet with the Council to discuss ways to cope with the reduction. The meeting is scheduled in the Council chambers at 9 a.m. tomorrow.

Council Chairman Patrick Kawano said if Lingle's projections are correct, the Council may be faced with the same situation as Honolulu, where officials have looked at raising property taxes and laying off workers.

"Wednesday is going to be an important meeting," Kawano said.

The administration has cautioned Council members to be careful about adding programs to the mayor's proposed budget.

The fiscal 1998-99 budget of $232.4 million proposed by the Council is about $7 million more than Lingle's proposed budget.

Kawano said the Council was able to trim $1.9 million from the budget for fiscal 1998-99. But he indicated larger cuts would be difficult.

The Council made up for most of the $1.9 million by reducing the amount it planned to use toward the purchase of land, primarily for recreation.

It initially planned to spend $20 million but reduced it to $18.2 million.

Kawano said the Lingle administration may suggest ways of reducing this fiscal year's budget to compensate for future losses.

Budget Director Georgina Kawamura said the effect of the state Legislature's decision will reduce tourist-accommodation tax revenues by 37.9 percent.

Kawamura said, meanwhile, the county's contribution to the Employees' Retirement System will increase by nearly $4.3 million in the 2000-2001 fiscal year.

"This combination of revenue loss and increase in expenses requires extreme caution now," Kawamura said.

The Council has raised the amount for substance-abuse treatment programs from $175,000 to $425,000.

It also added about $200,000 to the mayor's proposed $1 million for a youth center and $50,000 to a building improvement fund for the centers.

The Council also increased funds for Maui Community Correctional Center's work program from the $47,000 suggested by Lingle to $92,000.