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UPW raise may
cause property
tax hike

Oahu looks at a tax increase
to fund the raise, while Maui and
Hawaii plan no tax hikes

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Star-Bulletin staff

Unlike Oahu, neighbor island counties aren't considering raising property taxes next year to fund an 11 percent increase in pay for members of United Public Workers Unit 1.

Gov. Ben Cayetano and union executive director Gary Rodrigues announced an agreement Tuesday. The pay increases would come over two years in exchange for concessions that scale back vacation and sick leave for new hires.

The contract still needs to be approved by 8,700 Unit 1 members.

The announcement prompted Honolulu's managing director, Ben Lee, to warn Oahu property owners that the city may have to raise tax rates to pay $30 million more for the Unit 1 settlement and other public-union collective-bargaining raises next year and an additional $28 million more in increased retirement benefits.

The city said yesterday that the actual cost just for the Unit 1 increases is $2.8 million in the fiscal year that begins June 30, and $7 million more the following year.

Dixie Kaetsu, Hawaii County managing director, said the contract will cost Big Islanders $533,000 in the first year and $1.4 million in the second.

"As far as next year, at this point it doesn't appear to be a need for an increase in property taxes," Kaetsu said. "It's a little too early to say what's going to happen beyond that."

Like Oahu, Hawaii County is seeing a dramatic increase in employee retirement contributions, Kaetsu said. She estimated that would cost an additional $7.5 million.

Karlynn Kawahara, Maui County public information officer, said she did not have estimates on how the new contract would affect finances for the county.

Kawahara said Mayor James "Kimo" Apana had already anticipated increases in union contracts and retirement-system contributions and that property-tax increases are not being considered "at this point in time."

Kauai Mayor Maryanne Kusaka said in a prepared release that the increases would cost the county about $86,000 next year and about $1 million over the life of the contract.

But Kauai county spokeswoman Beth Tokioka said it did not appear that the county would have to raise property taxes to pay for the raises.