Watchdog group gives Maui County ‘D’ grade for financial practices
News Release from Grassroot Institute of Hawaii, September 28, 2021
Maui County has earned a “D” grade from the national government accounting watchdog group Truth in Accounting, for leaving its taxpayers with bills of about $15,300 each to pay off its debt, according to the nonprofit Grassroot Institute of Hawaiʻi.
A review of the county’s finances by the Chicago-based nonpartisan group found that, “Maui’s elected officials have repeatedly made financial decisions that left the county with a debt burden of $867 million, with most of the debt a result of unfunded retirement obligations that accumulated over the years.”
During a recent event in Wailuku, Sheila Weinberg, Truth in Accounting founder and CEO, said that future Maui taxpayers are going to be burdened with paying off that debt, and she said they’re “not going to receive any government services or benefits” in exchange. “It’s like a credit card,” she said. “They’ve already charged those costs up.”
Truth in Accounting’s assessment of Maui County’s financial health is based on the county’s audited financial report for fiscal 2020. According to its analysis, the county’s financial problems stem mostly from unfunded retirement obligations that accumulated over the years. The report notes that the county has set aside only 53 cents for every dollar of promised pension benefits and only 47 cents for every dollar of promised retiree health care benefits.
According to the group, Maui County in fiscal 2020 had only $451.7 million to pay $1.3 billion worth of bills, leaving county taxpayers owing $15,300 each to help make up the difference. According to Truth in Accounting’s grading scale, any government with a taxpayer burden between $5,000 and $20,000 receives a “D” grade.
“Hawaiʻi’s state debt is equal to about $37,000 per state taxpayer, and when added to the amount they owe at the county level, that leaves them with a bill about $52,300,” according to the report, resulting in an “F” grade for the state in 2020.
“On Oʻahu, Honolulu County also earned an “F” for its finances, leaving a debt of $29,600 per taxpayer,” according to Truth in Accounting. “When combined with their share of the state debt, Honolulu taxpayers each owe $61,300.”
Truth in Accounting concluded about Maui County that it “did not have enough money set aside to weather the pandemic.” According to the group, “The county was financially unprepared for any crisis, much less one as serious as we are now facing. The uncertainty surrounding this crisis makes it impossible to determine how much will be needed to maintain government services and benefits, but Maui’s overall debt will most likely increase. This will place a burden on future taxpayers.”
Keli‘i Akina, president and CEO of the Grassroot Institute of Hawaiʻi, said Maui officials need to rein in their spending habits, to provide relief to taxpayers and help bring down the county’s high cost of living.“