Maui Council advances $1.6 billion budget, splits 5-4 on mayoral spending limits

The Maui County Council unanimously passed a $1.6 billion fiscal year 2027 budget on first reading Friday, approving a contested shoreline stabilization grant after a lengthy discussion and splitting 5-4 on election-year spending limits on the mayor’s office.

The 9-0 vote moves the spending plan — about $8.4 million, or about a half of a percent, less than Mayor Richard Bissen proposed, shifting money from capital projects to day-to-day operations — one step closer to adoption.

Buddhist temple shoreline stabilization

Council members heard conflicting views on a proposed $2.5 million grant from the Special Management Area Revolving Fund for shoreline stabilization work at the Pā‘ia Mantokuji Mission, a historic Japanese Buddhist temple on Maui’s north shore. Waves are eroding the temple grounds, and large sandbags protect the property and the nearby cemetery.

On May 8, the Board of Land and Natural Resources gave the temple a one-year extension to keep the sandbags in place while work continues to find a long-term solution. Options include sand replenishment or construction of an artificial reef.

Marine researcher Mark Deakos, director of the Hawai’i Association for Marine Education and Research, testified in support of the $2.5 million in County funding, but only if relocation and removal are required. He strongly opposed using the funds for coastal engineering projects that disrupt natural beach and ocean processes.

He told council members that project decision-makers are being “misled by parties who stand to profit enormously from a $20 million coastal engineering project, one that was never requested or needed.”

Deakos said it’s a “red flag” when a “company proposing the project is also your primary source of information about its environmental benefits.”

“There’s a lot at stake here,” he said. “Wave energy is nature’s beach nourishment system. It moves sand onto our back shores during high surf events when unimpeded, and it’s completely free. Dune restoration works precisely because it works with natural processes.”

Ken Cheung of the sustainable engineering firm Oceanit acknowledged receiving a notice of violation from the County last week.

“We are working with County planners,” he said. “We are very well aware of all the state and county regulations… We understood we have an SMA permit, a current SMA permit, and we thought that the activity amounted to landscaping. Even if it was grading, it was below the SMA threshold for grading.”

Cheung said a Maui-based architectural firm has been consulted about moving the temple inland; and “they said to move the temple, even if it were to survive (they don’t think it will), it would be a lot more” than $2.5 million.

“And, there’s a question of whether there’s even enough land just to move the temple,” he said.

Council Member Nohelani U’u-Hodgins, who represents the Makawao-Haʻikū-Pāʻia district, argued that the County has an obligation to address the erosion problem rooted in historical sand mining at the site.

“If the County didn’t mine sand, I probably wouldn’t be this gung-ho to figure out what we need to do there,” she said. However, “I do think in this situation, the County has a debt to owe to that place and that temple. And perhaps if we didn’t mine the sand, the graves and the temple wouldn’t be so immediately threatened.”

Council Member Tamara Paltin pressed for specifics on how the funds would be spent. She noted that the Board of Land and Natural Resources gave the project one year to remove the revetment installed under emergency permitting.

She questioned whether the $2.5 million would be “the entirety of the cost,” or “are we projected to be on the hook for like $20 million or $30 million down the road?”

Responding to Paltin’s question about how the money would be spent, Cheung said: “The timeline and options are narrowing, and I would expect that the grant would be used to start dune restoration.”

The Council ultimately approved the funding with conditions. Those included a requirement that the project’s scope of work must align with special management area rules, and that grant administration must be done in consultation with the Department of ʻŌiwi Resources. Council members also are requiring that the grant recipient may not seek further state legislative exemptions from environmental review or coastal protection laws.

Real property tax rates approved

The Council adopted Resolution 26-69, setting real property tax rates effective July 1. 

An amendment by Council Member Kauanoe Batangan lowered rates for commercialized residential properties — a classification that includes short-term rentals and similar commercial uses. The Tier 1 rate dropped from $2.90 to $2.25 per $1,000 of assessed value; Tier 2 fell from $5 to $3.50.

The change reduces county revenue by an estimated $218,086. This reduction is offset by decreasing a transfer to the Open Space, Natural Resources, Cultural Resources and Scenic Views Preservation Fund by $108,086 and trimming a capital improvement grant to Scouting America’s Aloha Council by $110,000.

Testifier Tom Croly noted that commercialized residential properties, unlike long-term rental properties, do not benefit from a $200,000 exemption, and urged the Council to support the lower rates.

Higher-value investment properties will pay more under a tier restructuring adopted by the Budget Committee last month. The middle tier for non-owner-occupied properties now tops out at $2.5 million rather than $3 million, pushing more properties into the highest rate bracket — a change projected to generate an additional $5.7 million in revenue.

In a separate amendment, Batangan withdrew conditional grant language for the Maui Food Technology Center and said he would prefer all of his Kahului residency area grant funding go out for requests for proposals. His amendment was approved unanimously.

Election-year spending controls split council 5-4

A proposal by Council Member Gabe Johnson to reserve 50% of Office of the Mayor operating appropriations until after noon on Jan. 2, 2027, passed 5-4. The holdback limits what the current administration can spend during the post-election transition period, preventing large financial commitments—including salary increases beyond July 1, 2026, levels—before a new administration takes office.

Council Chair Alice Lee voted no, arguing the mayor needs flexibility to manage daily operations and respond to emergencies. “He actually deals with operations, whether it’s routine or emergencies,” she said. Council Members Shane Sinenci, Tom Cook and Keani Rawlins-Fernandez voted no as well.

Electric vehicle fees, grants and other actions

A motion by Rawlins-Fernandez to eliminate fees for county-owned electric vehicle charging stations — projected to generate about $11,000 — failed 4-5. Batangan and others said the fees help manage demand for charging stalls and reflect a carefully developed countywide policy.

The Council approved a $5,000 increase for the Lānaʻi Academy of Performing Arts, bringing its grant to $15,000 and passed $3 million for an Upcountry wildfire rebuild, recovery and mitigation fund.

The Council also unanimously adopted Resolution 26-92, authorizing the County to apply to the US Department of Housing and Urban Development for $1,932,564 in Community Development Block Grant funds for Project Vision’s case management program for individuals and families in need; a wheeled loader for the Hāna landfill; affordable housing rehabilitation; and housing and services for seniors.

The Council followed through in giving initial approval to proposed increases to sewer, water, refuse collection, and Planning Department fees.

Infrastructure projects

The Council’s budget includes several major infrastructure capital improvement projects, including:

• $111.6 million Waiale Road extension
• $95 million wastewater reclamation facility in Waikapū
• $40,651,000 for the North-South Collector Road (Waipuilani to Kaonoulu streets) in Kīhei
• $39.5 million for West Maui reliable capacity water projects
• $30 million for acquisition of Maui Land and Pineapple land and water system assets
• $27 million in Federal Emergency Management Agency public assistance funding for the West Maui Senior Center
• $25 million for the two phases of the Kaiahale ʻo Kahiluhilu project

The budget also authorizes $193,453,400 in general obligation bonds.

A final vote is planned for June 5, with the Council’s deadline for budget passage set for June 10. The new fiscal year begins July 1.