Tuesday, May 11, 2010


A CAPITAL IDEA: After explaining the difference between the real property tax “rate“ and the actual amount people pay in property taxes last month we almost facetiously suggested that in order to maintain services the council should consider raising the rate to a level where the payments would remain static.

We say facetiously because, as we described, the council has been so successful in making people believe their taxes go up only when the rate goes up that, as a victim of their success, they have apparently been refusing to consider raising the rate, especially in an election year... as evidenced by the lack of any mention of the possibility in the same breath as the proposed two-day-a-month furloughs of county employees.

But at yesterday’s budget hearing we were surprised to listen to a presentation by Councilperson Tim Bynum repeating the gist of what we wrote, sans the bombast.

Though we’re not sure what happened next since we never got back to watching the on-line coverage (not archived yet at press time) after the first break, it did get us thinking about the budget process and so we spent some time re-reading that county charter section today.

Another thing few people realize although it’s right there for their perusal is that the operating budget, is that what we commonly call “the budget” is only a portion of what we will actually spend this year because there is also a “capital budget” that goes to building new facilities.

The capital budget is for the most part supported by the sale of bonds and this year the county floated a new bond issue with a slightly better rate and also renegotiated our outstanding bonds.

Though many sort of treat the capital budget as some kind of free money, of course it’s nothing of the sort and shows up in the operating budget every year as a fixed expenditure that covers payments on the principle and the interest.

Not to say that it’s some kind of waste of money because it’s going to pay for many much needed projects like the repair of the levees in Hanapepe and Waimea and sewage treatment plants and the like- long neglected projects that have been delayed for years.

It obviously takes a lot of planning to decide on how much to borrow and how to spend it.

So it was no surprise that the county charter calls for one step that we don’t recall ever hearing or seeing.

Section 19.09B under Capital Program and Capital Budget, reads

The planning commission shall prepare the capital program for each of the ensuing five fiscal years, predicated upon the requests of the several agencies and based upon the finance director's statement of moneys likely to be available and the amount of bonds which the mayor believes would be proper for the county to issue.

We admit to being a little lax in keeping up with planning commission doings but if it ever did come before the commission it certainly wasn’t “prepared” by the commission with full public hearings and workshops to make sure that the public takes part in deciding where and how the money that’s borrowed is spent.

This isn’t just some formality. Although the mayor decides how much should be borrowed and the council approves and ultimately decides how to spend the bond money, the charter foresees the public participation part of the process as occurring before the planning commission- something that has never happened as far as we can tell.

Once again the county’s paternalistic attitudes cause corners to be cut wherever the public participation part of the process is concerned and the pervasive attitude inside the minotaur’s labyrinth- that that the public is nothing but a nuisance- rules the day.

1 comment:

Blahblahblah said...

payments on "principle" is inherently contradictory?

prin·ci·pal (prns-pl)
1. First, highest, or foremost in importance, rank, worth, or degree; chief. See Synonyms at chief.
2. Of, relating to, or being financial principal, or a principal in a financial transaction.
1. One who holds a position of presiding rank, especially the head of an elementary school or high school.
2. A main participant in a situation.
3. A person having a leading or starring role.
a. The capital or main body of an estate or financial holding as distinguished from the interest or revenue from it.

b. A sum of money owed as a debt, upon which interest is calculated.