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Monday, March 20, 2000

Big Island
economy ‘robust’

Mayor Yamashiro sees an
upswing in property tax
collections for next year

By Rod Thompson


HILO -- The Big Island economy has hit bottom and is rising again, says Mayor Stephen Yamashiro.

"What you see is a very robust economy that is not too dependent on tourism," he said.

A casual observer would hardly recognize that in the budget he has proposed.

With county revenues declining yearly, budgets have dropped from a high of $180.5 million in 1997-98 to the $174.5 million Yamashiro proposes for next year.

The Hawaii County Council will begin reviewing the proposal Thursday.

Yamashiro sees a bright spot in property tax collections, which make up about half the county's revenue.

Those taxes peaked at $92.5 million in 1996, the last year of sugar operations on the island, then fell steadily to an expected $82.3 million this year. Next year they're expected to climb to $83.7 million.

Fueling the increase will be a series of major West Hawaii land and resort developments, Yamashiro said. In East Hawaii, the real estate market, at least for large acreage for growing tropical fruit, is also active.

Meanwhile, the Big Island economy is stable, he said.

County Councilman Aaron Chung wouldn't call the economy "robust" but agreed, "It does seem like the economy is on the rise. Kona is starting to move."

As chairman of the Council Finance Committee, Chung will oversee the budget review.

"I've been a frequent critic of the mayor, but I've always maintained he is a prudent fiscal manager most of the time," Chung said.

One sign of that is the savings Yamashiro has squeezed out of tight budgets. Of $178.8 budgeted for 1998-99, the county spent only $165.8, saving $13 million.

Yamashiro said he did that by leaving job openings vacant and increasing efficiency.

The savings, applied to the following years' budgets, keep the county's credit rating high and allow cheaper interest rates on borrowed money, he said.

Chung agreed that the core of county services has been maintained but said "fringe" programs such as the county zoo have been under financial pressure.

Yamashiro also lists 19 building projects he would like the county to undertake. The largest is the $16.4 million Puainako Street extension in Hilo, which will be 78 percent federally funded.

The others are a Hilo sewer project ($4 million), Hilo landfill closure ($2.6 million), and Kailua-Kona flood control ($1.4 million). Even if the Council approves these projects, no bonds will be sold to fund them until next year at the earliest.

"It's not going to be within my term," Yamashiro said.

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