HILO — Big Island Mayor Harry Kim has long said he dislikes tax increases because they disproportionally harm the island’s poor and that his predecessors were wrong for imposing them.
Yet Kim raised property taxes during his first stint in elected office from 2000 to 2008. He also hiked various other government fees, like vehicle registration charges that rose three consecutive years.
He returned to the mayor’s post in December 2016 and told the Legislature that not raising taxes was a top priority.
Yet within six months Kim had increased property taxes, nearly doubled the gasoline tax and imposed a 27 percent jump in the commercial tipping fee businesses pay to dump their rubbish. That last tax had been unchanged since 2007, when Kim won approval to boost it.
Hawaii Island Mayor Harry Kim said he has had to take difficult steps to balance the county budget.
Cory Lum/Civil Beat
“Raising property tax 6 percent across the board has got to be the hardest thing I’ve had to do because I assured them I would not do that unless I had to, and I had to — to get the balanced budget,” Kim told the Senate Ways and Means Committee in August in opposing a statewide increase in the hotel-room tax.
He said more than 70 percent of Puna families and nearly all Kau families meet low-income criteria for their kids to receive free school lunches.
More recently, Kim told the legislative money committees in January that the general excise tax is “the worst regressive tax. We’re taxing again the people who can least afford to pay taxes.”
That same month he became the first Hawaii County mayor to propose adding one-half percent to Hawaii’s 4 percent GET. (Honolulu and Kauai County have exercised that authority, which the Legislature granted the counties as a means of funding only transportation-related costs.)
“This is the third time we’re asking you to help us with the budget,” Kim told lawmakers Feb. 21. “I will say the very, very difficulty in coming to the County Council to say, ‘Raise taxes again.’”
The third time might not work, however, as a council committee gave the GET bill a negative recommendation. Acting as the full body, it then postponed consideration so members can first scrutinize Kim’s budget requests.
“We raised the fuel tax. We said we’re going to do this, we’re going to do that, and the people haven’t seen anything,” Chairwoman Valerie Poindexter Poindexter said when the Finance Committee took up the bill last month.
Noting county expenses have outpaced its revenues, Kim told Civil Beat that he’s facing an estimated $7 million operating shortfall for the fiscal year starting July 1.
“God knows, who wants to raise taxes?” he said.
Tourists would pay 30 percent to 40 percent of the $24 million the GET hike is expected to generate annually, Kim said. He wants the first $12 million, the amount to be raised during the coming budget year due to a Jan. 1, 2019, implementation date, spent on the county’s public bus system that’s in “shambles” due to broken vechicles, low ridership and other ongoing issues.
“All I’m trying to do is pay the bills,” he said.
Business owner Tim Beatty said he would have to charge his customers more if Hawaii County raises the island’s general excise tax.
Jason Armstrong/Civil Beat
Tim Beatty, owner of Hilo Surplus Store, said he’d have to pass a GET increase onto his customers.
“Any type of tax increase is always going to be met with objections,” he said.
Still, Beatty noted Hawaii County’s GET is low compared to many mainland communities and said he’d be for an increase if the money is spent locally.
Kim’s expanded explanation of the tax proposal can be viewed here. He’s held public hearings around the island to gather input, much of which has been in opposition. Council members also have received an earful.
“Adding additional GE tax on food and medicine is WRONG, WRONG, WRONG,” Hilo’s Chris Madden wrote in testimony to the council. “No one is helped when you take from those that have the very least.”
Daysha Mendes, of Puna, told lawmakers that she lives paycheck to paycheck and cannot afford more taxes.
“Are you trying to drive us out of our homes? If so, it’s working,” she wrote.
Four tax hikes, including the state’s transient accommodations tax, is enough, Captain Cook resident Kristina Anderson wrote to the council.
“The GET is a regressive tax on EVERYTHING – food, medical care, the dentist, the vet, rent, everything,” she testified.
As for the mayor, he doesn’t see “any inconsistency” regarding saying one thing regarding tax hikes and doing another.
On March 1, Kim gave the council a $515.7 million spending request that’s $24.9 million or 5.1 percent higher than this year’s. Without a GET increase, it’s an “ugly” budget that has no funding to address homelessness or improve municipal bus service, he said.
Big Island motorists now pay a higher gasoline tax, one of three Mayor Harry Kim has raised since taking office a little more than a year ago, to help finance road maintenance like this recently repaved intersection.
Jason Armstrong/Civil Beat
There’s money for employee raises, however. On the same day he submitted his record-level spending plan, Kim received a 23 percent pay hike. That’s a $30,581 raise, bringing his second-year salary to $162,581.
Kim told state lawmakers he was “dammed embarrassed” to learn the Salary Commission had raised his wages, along with those of 39 other Big Island elected officials and county administrators. The total cost to taxpayers will be about $1.5 million a year.
Despite his embarrassment, Kim has chosen not to donate the extra money to a local charity, as former Mayor Billy Kenoi did, or reject it, as former Mayor Stephen Yamashiro chose to do.
“I’m not going to go there,” Kim said when asked about those options. “I don’t play that game.”
But some of his constituents hope Kim would do his part.
“Perhaps the mayor and the County Council members should decline their raises this year,” Darlene Ashley Fagan wrote in testimony she presented to the Council last month in opposition to raising the GET.
To help their local government cut costs, Big Island voters in 2000 established the nine-member Cost of Government Commission. It’s charged with “abolishing services, activities, and functions not necessary to the efficient conduct of government,” according to the Hawaii County Charter.
Kim nominated eight of the nine members Jan. 19, 13 months after his term started. At his request, the County Council waived the request from committee review and approved all of the nominees Feb. 7.
The commission will meet first in March, said Roy Takemoto, executive assistant to Kim.
“This time we’re not going to just go through the motions on this,” Takemoto said, adding the commission will examine “big” costs.
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Jason Armstrong has reported extensively for both of Hawaii Island’s daily newspapers. He was a public information officer/grant writer for the Hawaii County Department of Parks and Recreation from 2012 to 2016 and has lived in Hilo since 1987.