WAILUKU, Maui — With declining property values and predictions of only slight growth in tourism, the heady days of double-digit percentage increases in county spending are over.

The $561 million Maui County budget for the next fiscal year, announced yesterday by Maui Mayor Charmaine Tavares shows cuts in county spending on capital improvement projects, increases in water, sewer and trash collection fees, and aggressive pursuit of grants and other funding sources.

The 2008-09 fiscal year begins July 1.

Tavares noted that in the past six years, county revenues and expenditures more than doubled, mostly due to skyrocketing property values that pumped riches into the treasury.

But with county revenues expected to rise by only about 2 percent, and with increasing payroll and retirement obligations, the mayor said she is proposing a "tight and focused" budget.

County Council Chairman G. Riki Hokama gave Tavares' spending plan generally good marks after an initial review. But he noted the budget was devised before recent setbacks in the financial world cast a shadow over the nation's economic prospects.

"I appreciate the mayor's optimistic proposal, but for me, I'm a little bit more cautious and a little bit more on the conservative side. With what we're seeing nationally and globally, and with the price of fuel going up higher both for vehicles and air transportation, my belief is that there will be a major impact on the visitor industry and that those dollars may not be realized at the levels contained in the budget," he said.

"This is a good time for us to start making adjustments to our economic engine to wean us off the impacts from the visitor industry."

To that effect, Hokama said he was pleased the mayor included $15 million for a 300 million gallon reservoir for Upcountry, a major farming district. The budget also calls for $10 million in economic development grants.

The administration anticipates $220 million in real property tax revenues, an increase of $5 million. Property taxes comprise 39 percent of county revenues.

Tavares said no change is expected in the amount of transient accommodations tax revenues the county should receive, about $22 million.

To help fund the growing cost of government operations and construction, Tavares said her administration is pursuing grants totaling $87.6 million, an 80 percent increase.

"As the economy slows, the need to look beyond local resources is magnified. The requirement for sufficient revenue to fund operations and infrastructure does not diminish," the mayor said in her budget summary.

After two straight years of significant property tax relief, Tavares is not proposing any change in tax rates. However, sewer bills would increase up to $3.80 per month for a single-family residence, with average residential water fees rising $2.75 per month.

An average household now pays bimonthly sewer and water bills of $93.30 and $82.50, respectively.

Residential garbage collection fees would increase $4 per month to $16.

The $461 million operating budget is up 6 percent from the current year. Expenses include $10 million for pay raises resulting from collective bargaining, plus $34 million in contributions to retirement programs.

Tavares proposes adding 32 new positions, spread among 11 departments, to the county payroll, which now stands at roughly 2,300 positions, including seasonal workers.

Spending for capital improvement projects is $99.9 million, a 12 percent drop from the current fiscal year. Tavares said she hopes to supplement that amount with $27.6 million in grants.

CIP highlights include $1 million to buy land for new emergency management center, $1.5 million for a new Lana'i Senior Center, $7.6 million for Phase 1 construction of the South Maui Community Park, $5.3 million for Kaupo emergency rockfall mitigation, $2.5 million for a traffic roundabout at Liloa and Pi'ikea avenues, and $1.25 million for new tennis courts at Lahaina Civic Center.

Tavares wants to use $1.75 million from the Open Space, Natural Resources, Cultural Resources and Scenic Views Preservation Fund to help purchase four properties: 78 acres of coastal wetlands at Nu'u; a perpetual easement over 6.3 acres in Ke'anae to ensure kalo lo'i are protected; a 7.4-acre parcel at Morris Point to develop East Moloka'i's only public beach park; and 196 acres of southeast Moloka'i watershed.

In some cases the county would be pooling its money with state, federal or private sources to achieve the acquisitions. The open space fund receives 1 percent of property tax revenues.

The Affordable Housing Fund, which gets a 2 percent share, is projected to gain $4.4 million in the coming fiscal year.

Reach Christie Wilson at cwilson@honoluluadvertiser.com.