Budget panel weighs department cuts amid property tax certification, stable revenue

Maui County Council Member Kauanoe Batangan has proposed an across-the-board 1.25% budget cut for non-first-responder departments that would yield somewhat more than $5 million in savings from Mayor Richard Bissen’s fiscal 2027 $1.61 billion budget proposal.

Batangan, vice chair of the Budget, Finance and Economic Development Committee, told committee members Monday that his proposed cuts stemmed from the county’s yearly record of carryover savings dating back to 1999, which was the first year of former Mayor James “Kimo” Apana’s administration. The current carryover savings is estimated at more than $174 million.

Batangan noted there were significant events that disrupted the county’s budget, including the 9/11 terror attacks, the financial crisis, COVID-19 and most recently the August 2023 wildfires.

Stripping away variables, such as the county’s capital improvements spending, Batangan said “I do think we are still at a historic high, meaning we are overtaxing our citizens and not delivering on all of the goods and services that we promised.”

He said he took into account the need for first-responder agencies, such as the police and fire departments to respond to emergencies, and decided to limit his broad-based cuts to non-emergency departments and agencies and keep cuts to general funds only.

“I got about $5 million off of that and figured it was fair,” he said. “I think it helps get us back towards historic norms.”’

He mentioned a few specifics for cuts, as committee members continued to show they were in cost-cutting mode as called for by Budget Committee Chair Yuki Lei Sugimura earlier this month when she urged fiscal discipline amid the rising cost of living for residents.

“I personally don’t think Ag needs two secretaries,” he said. “I don’t think Transportation needs $2 million more just to permit the ferries. I don’t think Police need $1,000 chairs or that the Mayor’s Office needs four people making director-level salaries. But each of them is telling me that they need this. And so I think that there’s fat to be cut, and I think that 1.25% is a reasonable amount to start with.”

A broad-based cut, by a percentage, would give county agencies and departments flexibility on where to cut,” he said.

“Well done,” Sugimura told Batangan, but he received pushback from Council Members Tamara Paltin and Keani Rawlins-Fernandez.

“I would rather take a scalpel approach than a sledgehammer,” Rawlins-Fernandez said, adding that she wanted to revisit department requests for funding in context of council member priorities after community budget hearings.

Paltin opposed broad-based cutting and preferred targeted cuts. She said she’s concerned about departments that use a lot of fuel or electricity, such as the Departments of Water Supply and Environmental Management, that consume a lot of electricity and are vulnerable to power costs that have been impacted by the war in Iran or by “this unstable federal administration.”

She also wanted to take into account the Department of Environmental Management’s proposed 9% sewer fee increases.

“I’m opposed to broad cuts without taking into account external factors,” Paltin said. “We did just see Public Works through a budget amendment to cover the increase in fuel costs.”

Ultimately, the committee decided to set Batangan’s proposal aside and revisit the budget requests of each department.

Funding cuts for expansion positions

Sugimura told committee members her intention was to retain proposed expansion positions, but to remove funding for them.

“As we all know, there are numerous vacancies across departments. Some of those positions are inactive, but continue to be funded,” she said. “Departments have told us they’re using funding from vacant positions to cover overtime. That approach distorts the true cost of operation and overstates the amount needed for fringe benefits. That’s a very expensive.”

The total amount proposed for expansion positions is more than $3.4 million, plus associated fringe benefits, she said.

Property tax roll certification

The committee’s discussion of budget cuts and expansion positions followed the official certification of the county’s property tax rolls by Department of Finance Director Marcy Martin.

According to the department’s property tax certification, all properties in Maui County were valued in 2026 at $83,177,789,400. Using the Bissen administration’s proposed tax rates, the properties would yield $660,365,625, after deductions for circuit breaker tax credits and adjustments for late exemptions. Real property taxation represents 40.8% of Maui County’s annual revenue.

The single category with the most revenue would be transient vacation rentals and short-term rental housing with $254,293,213 from 13,234 property parcels.

Overall, there are 73,988 properties in Maui County’s tax system. The current assessments were derived from market data up to June 30, 2025.

“And so assessed values for the ’26 assessment year decreased just under 1%, which is relatively stable considering the significant increases in the past nine out of 10 years,” Martin said.

She noted that the long-term rental classification grew from 3,223 to 4,350 parcels compared to last year, and that the transient vacation rental/short-term rental housing showed the largest value reduction.

The long term rental classification continues to grow with 4,350 parcels compared to 3,223 last year. And the TBR STRH class shows the largest value reduction.

Decision-making phase

The Budget Committee has entered the decision-making phase of its deliberations, beginning a department-by-department review on Monday.

For the Department of Agriculture, the committee unanimously agreed with Council Member Gabe Johnson’s proposal to increase the department’s Local Food Purchasing Incentive Farm-to-Family grant by $1 million to $2 million.

Johnson noted a 2025 Hawaiʻi Food Bank report that 41% of Maui County households were food insecure.

“Unless we act, food insecurity is likely to get worse with the impact from recent storms and the war,” he said. “Remember members, we are at war right now. This farm to family program supplements food pantries and feeding programs so they can afford to purchase healthy, fresh, locally grown foods.”

He added that the department received more than $3 million in requests last year, “showing that there is need and demand for these funds.”

Sugimura’s priority of adding $500,000 for Lokahi Pacific’s animal feed crop pilot program for local livestock farmers also passed unanimously.

Batangan received committee support for his proposal to secure a $25,000 grant for the Rusty Maui Cat Collective trap-neuter-release program, and Council Chair Alice Lee added $250,000 for the Maui Humane Society’s pet retention program.

Paltin won committee support for two revolving fund priorities: an additional $20,000 for the Humane Society’s vehicle and $40,000 for spay/neuter services.

A departmental personnel cut of $83,723 was approved, targeting unfilled expansion positions, and a further $52,656 cut proposed by Batangan targeting the secretary to boards and commissions was approved.

Maui Emergency Management Agency

Committee members unanimously approved Paltin’s proposal to add $2.3 million to Emergency Management Agency to address the agency’s top two wildfire risk priorities.

The committee also approved cuts to MEMA’s expansion positions by $129,000, while preserving a warm-body position funded by Maui United Way. An additional $50,000 cut to the agency’s operations account for what Batangan described as disproportionate increases in travel, phones and per diem. His motion passed 9-0.

The committee deleted $10,000 allocated to Maui Search and Rescue, which had neither applied for its fiscal year 2026 grant nor was in compliance with county requirements.

The committee will continue its deliberations this morning.