Mayor Richard Bissen delivered his $1.7 billion proposed spending plan for fiscal year 2025 to the Maui County Council on Monday, a 34% increase over the current budget due to the ongoing recovery from the destructive Aug. 8 fires.

The $429.2 million hike is mostly funded by outside revenue earmarked for fire recovery efforts that include housing, debris removal, and repair and replacement of infrastructure, he said.

“Collectively, we have begun a daunting journey, navigating through challenging times for all of us,” Bissen said at a brief ceremony to present his budget proposal for the fiscal year starting on July 1 to the council.

“We will continue working together to address the most complex natural disaster in Hawaii’s history, and as we know, the worst wildfire disaster in the United States in over 100 years,” he said.

It’s a much rosier budget picture than in early October when the county was projecting a $31.2 million shortfall, primarily due to the loss of $20 million in property taxes, which were waived for people who lost their homes in the fires.

But increased property tax assessments more than offset the revenue loss, resulting in no budget shortfall, Budget Director Maria Zielinski said in an email Monday.

In the new 1,028-page budget, property tax revenues are expected to increase by nearly 10% due to the proposed property tax increases, which come at a time when the median price for a single-family home on Maui in February was $1.25 million, up 16% from a year ago.

The proposed property tax increases are for all non-owner and owner-occupied categories, commercial, residential, transient vacation rentals and short-term rentals, although they are bigger for higher-priced properties. The county also bumped wastewater sewer rates by 2% and increased water rates based on usage.

The county also has requested $150 million from the state — $401 million over three years — for housing and a $54.5 million bridge loan from the Hawaii Community Foundation to support housing, infrastructure and other recovery needs.

“These new revenue sources are absolutely critical to ensuring anticipated revenue streams can continue to serve ongoing operations for all of Maui County,” Bissen said.

Bissen added that he realizes the Lahaina fire response and recovery is greatly impacting the state’s budget, but that no one has felt it more than the 12,000 survivors who lost everything.

“Never has Maui County been presented with a more critical and justified need,” he said.

The proposed budget with operating expenses of $1.3 billion and capital improvement projects of $341 million takes into account the need to continue everyday county operations on Maui, Molokai and Lanai, while responding to the fire impacts that have placed an “inordinate amount of demand on the county for both human and financial resources,” Bissen said.

Bissen said he asked his departments to keep the budgets for their normal county operations as flat as possible, and they did. The proposed budget for departments carrying out routine operations is only a 1.2% increase from the current year.

The vast majority of the requested $153 million increase in operating funds is attributable to wildfire-related departmental expenses.

This includes funding to mitigate against future emergencies, including updating the Maui Police Department’s communications system, adding 29 firefighter positions with some going to the remote areas of Molokai, Lanai and Hana, building a new Haiku fire station and increasing the firefighting fleet with a tanker and off-road mini-pumpers. There is $20 million in the proposed budget to restore the county’s emergency fund.

The county will be adding positions to the Department of the Corporation Counsel for wildfire-related information requests and increased legal matters.

The budget also is funding three new departments and establishing the East Maui Water Authority, which all were approved through charter amendments by voters in 2022. The new Department of Oiwi Resources is being created to better manage cultural resources and the splitting of the Department of Housing and Human Concerns is to provide more focus on affordable housing.

The county also is continuing to fund the Office of Recovery that was created last year to deal with the wildfire aftermath that killed at least 101 people and destroyed more than 2,000 structures and much of Lahaina’s infrastructure.

The budget was helped by carryover savings of $49 million from the general fund. This includes hundreds of county positions that were funded but remained vacant.

Projects also will be funded by a projected $45 million from Maui’s new General Exercise Tax surcharge that began Jan. 1. This revenue would support a water project on Molokai, a plan for Lanai wastewater reclamation, filter upgrades at the Kamole water treatment plant and upgrades to the North Kihei mauka transmission system. The council has directed that 20% of these funds be used for infrastructure projects with the Department of Hawaiian Home Lands.

About $60 million is projected to come from Maui County’s share of the Transient Accommodation Tax.

The proposed budget has $47 million for the Affordable Housing Fund. To help diversify and strengthen the economy, $7.4 million is proposed for grant subsidies to local farmers, and other grant subsidies for small business promotion, economic diversification, microenterprises, workforce development programs, youth and student programs, technology, cultural programs and the arts.

The proposed budget now goes through a series of district community meetings and County Council meetings that begin April 1 with the public invited to provide input. The County Charter calls for the budget to be adopted by June 10, in time for the new fiscal year to begin July 1.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.