HILO, Hawai'i — Big Island Mayor Harry Kim yesterday vetoed the County Council's proposed $408 million budget, saying the council was proposing to spend too much and save too little.

"The seriousness of the economic situation mandates that the county's balanced budget stay within what we project to be realistic revenues," Kim told the council in his veto message.

"This veto is based on the firm belief that the council's proposed budget is not considered to be fiscally prudent due to unrealistic revenue projections and the lack of funds set aside for emergencies and revenue shortfalls."

This is the first budget veto by Kim. The council has until June 30 to act if the members intend to override the veto, said county Finance Director William Takaba.

Kim had proposed a $403 million budget for the year starting July 1. Built into that spending plan were modest property tax cuts for agricultural lands and homeowners, but the council opted for larger tax cuts than Kim had proposed in both areas.

That decision will reduce property tax collections by $2.3 million more than the administration anticipated, Takaba said, and the county is also likely to see a decline in the amount of money it receives from the state hotel room tax.

Kim also said in his veto message the council had overestimated how much leftover county money will remain unspent at the end of the current budget year.

The mayor also disagreed with council decisions to eliminate $1 million Kim had wanted to deposit into the county's "rainy day fund" budget stabilization fund, and to reduce the amount Kim wanted to deposit into another fund earmarked for recovery from natural disasters.

Kim argued in his veto message it is "of the utmost importance" that the county regularly deposit money into the budget fund, especially now that the Big Island faces an uncertain economic climate.

The nine-member council is expected to meet later this month to consider an override. If the council cannot muster the necessary six votes for an override, Kim's original $403 million budget will take effect.