Record revenue estimates mean Hawai'i's four major counties will start the new fiscal year July 1 with unprecedented spending plans that expand construction projects and government payrolls.

But county budget officials aren't quite wringing their hands with glee at the prospect of such riches.

Much of the wealth is being pulled from the pockets of real property owners who have seen real estate values — and their tax bills — skyrocket in the past couple of years. Shell-shocked taxpayers are demanding substantive relief, and local governments have the tough task of balancing those concerns with rising construction, energy, fuel, wage and benefit costs and the need to fund long-deferred sewer, water and road projects.

"Frankly, it's a lot easier when you don't have money. You don't like to make decisions to cut, but your mentality is that you are trying to be frugal and there's an understanding that you don't ask for as much," said William Takaba, Hawai'i County finance director.

Honolulu and Maui counties lowered property-tax rates and provided other help for homeowners during their recent budget sessions. Kaua'i and the Big Island enacted tax relief last year and did not offer new assistance to owner-occupants this time around.

All the property-tax measures will draw millions of dollars from county treasuries in fiscal 2007, but anticipated increases in hotel room taxes and county fees will add to the revenue pot, along with the substantial rise in property-tax collections.

In addition to having more cash on hand, Takaba said that higher revenues raise the counties' funded debt ratio, providing more capacity to borrow money for big, expensive capital improvement projects that couldn't be funded otherwise.

Once again, more than half of Honolulu's $680 million CIP budget is earmarked for sewer projects islandwide, including $22 million for improvements to the Waikiki Beachwalk wastewater pumping station, where a massive sewage spill occurred early this year. An additional $44 million is set aside for road resurfacing and street repairs, and $33.1 million for construction of the long-planned North-South Road in Kapolei.

On the operating budget side, spending is up a modest 8.5 percent, including the addition of 99.5 jobs. About half those positions are to meet federal environmental regulatory controls and compliance and 33.5 are in public safety.

Mayor Mufi Hannemann characterized the fiscal 2007 budget as a "no-frills" spending plan, continuing his "need-to-have" theme from the current year.

Hawai'i County is using the bulk of its $137 million construction budget to satisfy mandates such as access improvements under the Americans with Disabilities Act, as well as road projects and overdue renovations to county facilities. The county also added 112 new positions, many in public works and parks.

The budget includes $1 million for a new "rainy day" fund to serve as a cushion against an unexpected slide in county revenues caused by natural disasters, terrorist acts or other unforeseen events.

"We didn't want another repeat of 2001 and 2002 when we had to raise taxes," Takaba said.

Another $1 million was allotted for an open space preservation fund.

Maui's fiscal 2007 CIP budget is up more than 50 percent, but Deputy Finance Director Wayne Fujita said that doesn't mean it's raining money.

"It's just like your family budget. When your employer gives you a raise you think you're rolling in dough, but not really, because your costs have gone up. It's the same for the counties," he said. "We have to keep pace with construction costs that have gone up 30 or 50 percent, and it's that much more expensive to maintain police or fire stations and to build roads.

"We still have to tighten our belts."

Maui's construction spending includes $26 million in wastewater treatment upgrades, $12.5 million in road and drainage improvements, $9.4 million in park improvements and $15.2 million for construction, design or land acquisition for fire and police stations in Kaunakakai, Ha'iku and Kihei.

The county increased its payroll by 96 employees, including 12 new positions for a full-time hazard materials response team in the Fire Department.

In addition to reducing homeowner property tax rates and boosting the owner-occupant exemption, Maui came to the aid of consumers by cutting its gasoline tax by 2 cents per gallon.

Michael Tresler, Kaua'i's finance director, said the robust revenue outlook is allowing his county to resume maintenance programs and other deferred needs, such as extensive upgrades of neighborhood centers.

"We set up an annual equipment replacement program, and hopefully we can catch up on that too," Tresler said.

"There's no fluff or pet projects (in the budget). We're focusing on our core requirements, things like parks, roads, sewers and infrastructure."

With this year's deadly Kaloko dam flood and the island's other recent history with natural disasters, disaster response also was on the minds of Kaua'i officials during the budget process. Funding was provided for a disaster trust account and the purchase of three 6-inch pumps to be placed in separate districts for use in floods and daily operations.

Additional money was put into the county's CIP contingency fund, which stands at nearly $1.9 million, for emergencies and other unanticipated costs.

Eight new positions were created, with additional staffing for police, fire, the county attorney's office and the humane society.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.