WAILUKU >> Maui County is anticipating a $31.23 million revenue shortfall in the current fiscal year due to the Aug. 8 wildfires in Lahaina and Upcountry Maui, triggering a round of proposed budget amendments to cut spending.

More than $19.52 million of the shortfall is from lost real property tax revenues after the fires burned more than 2,200 structures in Lahaina and 19 homes in Kula and Olinda, causing an estimated $5.5 billion in damage. The West Maui disaster also killed at least 98 people.

Maui Mayor Richard Bissen on Aug. 16 announced that the county would waive real property taxes for the current fiscal year for improved properties destroyed in the blazes.

Bissen last week submitted Bill 94 to the Maui County Council proposing to amend the county’s $1.07 billion budget for fiscal year 2024 to reflect the drop in revenues and outline spending cuts.

In his Sept. 28 bill submittal presented at Friday’s Council meeting, the mayor indicated that in addition to the reduction in real property tax revenue — to $515.43 million from $534.95 million — his administration expects shortfalls of $9.73 million in charges for government services, $240,308 for licenses and permits, $838,731 in fuel and franchise taxes, and $900,000 in special assessments.

The proposed budget cuts, large and small, reduce appropriations across a host of county departments, touching on a wide range of programs such as liquor control, housing and human concerns, substance abuse programs, sports and event promotions, tourism management planning, environmental protection and sustainability, and road, bridge and drainage maintenance.

In all, total operating budget appropriations were trimmed to the tune of $23.5 million, including $5.3 million in salaries and $18.2 million for operations and equipment. An additional $7.8 million was culled from the capital improvement projects budget.

County Budget Director Maria Zielinski told the Honolulu Star Advertiser the revenue shortfalls won’t begin to be felt until December or January. She said department heads were given a loose benchmark of 5% in spending cutbacks and were asked to identify areas they would be comfortable trimming without greatly affecting services.

Some of the savings came from deferred hiring, a reduction in travel for training and other purposes, and delaying capital improvement projects.

Zielinski was uncertain whether additional adjustments would be necessary as the county continues to deal with the fallout from the disaster and recovery efforts.

“We just don’t know at this point. We’re trying to be as fiscally responsible as possible based on what our directors are projecting,” she said. “We almost feel like we’re overestimating losses, but we don’t know.”

She also pointed out that revenue from a 0.5% general excise tax surcharge that goes into effect Jan. 1 was not factored into the county budget. Those revenues are earmarked for infrastructure.

The county’s first responders were not immune from the budget knife, with the Maui Police Department targeted for $1.8 million in spending cuts, including close to $60,000 for administration, $1.13 million for investigative services, $100,000 for uniformed patrol services and a little more than $501,000 for technical and support services.

Sure to raise eyebrows are proposed cuts to the Department of Fire and Public Safety, including $161,000 for administration, $39,500 for training, $89,000 for fire and rescue operations, $16,500 for fire prevention and nearly $48,000 for the ocean safety program.

Zielinski said the spending reductions represent only a small percentage of MPD’s $73.3 million budget from the General Fund and the Department of Fire and Public Safety’s $55.7 million budget.

Council Chair Alice Lee is unhappy with reduced spending for firefighting and also questioned the proposed bill’s effect on “essential human services.”

“I would not necessarily support that because there will probably be other areas such as CIP — projects that we’ll never get to this year — that could be deferred and we could use moneys from there. And then nobody would be deprived of any services, because I see child care services, immigrant services — all those important human services that need to be supported,” she said.

Lee expects Bill 94 is the first of many budget amendments to come.

“We are going to take a serious hit on real property tax revenue,” she told the Star-Advertiser, noting that West Maui contributes at least a third of the county’s real property tax revenues, “most of it from the visitor industry and short-term rentals and timeshares that pay the highest rates.”

“Without visitors, obviously we’re going to have to look at the possibility of giving them perhaps some deferral payments or some discounts, and then, of course, those who lost their homes and businesses would be exempt from paying,” she said.

Lee introduced her own legislation, Bill 91, that would grant temporary exemptions from real property taxes, delinquent taxes and penalties not just for properties destroyed in the Aug. 8 fires, but for those that are still standing but uninhabitable because of major damage.

In a separate proposed budget amendment, Bill 93, the administration sought to add a $12.5 million grant from the Coronavirus State Fiscal Recovery Fund to the Mayor’s Office to be used to award competitive grants to businesses directly and indirectly affected by the wildfires.

According to a Sept. 27 submittal letter to the Council, Zielinski said the fund was intended to support state and county governments in responding to the effects of the COVID-19 pandemic, but was amended in December to provide flexibility to use the funds to respond to natural disasters, build critical infrastructure and support community development.

Bill 93 was approved on first reading by the Council during Friday’s meeting, and Bills 91 and 94 were referred to the Budget, Finance and Economic Development Committee.