Mayor Billy Kenoi says higher tax rates for non-homeowner properties, service reductions and suspending payments to the open-space fund are all needed to balance Hawai'i County's next operating budget.

"We're looking at $31.8 million less," Kenoi said Tuesday of the balanced budget proposal he plans to give to the County Council by a March 1 deadline.

That would make for a roughly $371 million spending package for the fiscal year starting July 1.

Property tax revenues, the main funding source for local government, are expected to drop by about $13.9 million, based on existing tax rates, Kenoi said.

"We anticipate presenting to the County Council a proposal to adjust some rates to make up the anticipated shortfall," Kenoi said.

Properties in the homeowner and affordable-rental classes won't be affected, and declining values should offset any rate hikes to the other property classes, he said.

"We're anticipating the taxpayer will see a lower tax bill next year," he said of biannual payments due each August and February.

The council sets the tax rates each year.

Noting he's been working closely with state and federal leaders for financial aid, Kenoi said he's asking all departments to cut programs, services, purchases and other "discretionary" spending by 10 percent, while continuing the hiring freeze he imposed soon after taking office Dec. 1. Salaries and wages are excluded from the cuts, he said.

"We're both reducing costs and shrinking government," said Kenoi, who is working on his first budget proposal.

He wants to defer the Police Department's transition to a county-owned fleet of patrol cars for a yearly savings of $1 million, have council members forgo personal discretionary accounts to save a combined $900,000 annually, and eliminate all $300,000 from the coqui-eradication program and have the state and federal governments take on that responsibility.

Kenoi said the county can save an additional $4.5 million a year by halting payments to the Public Access, Open Space and Natural Resources Preservation Fund.

Noting the county currently has $8.8 million in the fund, he said he wants to suspend future payments for two years.

Big Island voters in 2006 amended the County Charter to mandate 2 percent of property tax revenues go into a fund to buy land for public use and preservation.

Kenoi said the council has the authority to withhold those payments.

He also wants to use all $2 million in the county's "rainy day" fund " 'cause you know it's raining."

Asked about increasing county fees, Kenoi said, "That's all still being evaluated."

While he's not seeking to charge for the disposal of residential trash, Kenoi said the park ranger program, West Hawai'i golf course subsidy, and county litigation fund all could be reduced.

"We're going through department by department, line by line, and programs that we can eliminate or defer, we are," he said.