Property tax assessments might be put on hold

Seeking more information, the Kaua’i County Council’s Committee of the Whole recently held up action on a bill proposing to freeze property tax assessments to January 2001 levels for homeowners, farmers and other property owners.

During council committee meetings held Thursday at the historic County Building, the committee approved a request from councilman Kaipo Asing for a workshop on the bill. The date has yet to be set.

The bill, introduced by council chair Ron Kouchi and supported by councilmember Bryan Baptiste, both mayoral candidates, is aimed at allowing residents to remain on their properties in the face of skyrocketing assessments and higher tax bills.

Supporters of the legislation contend the situation has come about because of rampant property purchases by wealthy mainland buyers over the last four years.

Residents at a recent council meeting commended Kouchi for his bill, but said they would want it amended to reflect a roll back period that goes back to 1999 and beyond, before sales to mainland buyers forced assessments to spiral.

The bill proposes freezing of assessments for single-family residential, agriculture and homestead tax categories.

“The philosophy is to ensure homeowners are not forced to sell their homes because they can’t afford to pay their property taxes,” Kouchi said.

In an earlier bill, Kouchi proposed a rollback period to 2002, reflecting property tax revenues of $21 million.

The latest bill, if approved by the full council and the county administration, proposes a rollback period to 2001, which boasted more than $18 million in property tax revenues.

This year, the county is projected to collect about $41 million in tax revenues from eight tax categories, which include businesses and hotels, according to finance director Eugene Jimenez.

Baptiste said he worked with county finance officials for three months to develop a bill like the one Kouchi has proposed.

Ray Chuan, a candidate for the Kaua’i County Council in this election year, commended Kouchi for proposing the bill, but noted he, too, has called for a freezing of property assessments.

People who own property near new home construction in Hanalei, Ha’ena, Kilauea and Kekaha are suffering and need the relief the bill can provide, contends Chuan, a Hanalei resident.

“Many homes and farms have been hit with assessment increases of up to 600 to 700 percent in the last three years,” Chuan said.

Rampant and sometimes repeat sales of properties have property owners who don’t want to sell running scared, Chuan contends.

“The person who can buy it at fair market price is gong to build another multi-million dollar mansion, and then it will affect the neighborhoods,” Chuan said. “It spreads like a virus.”

Chuan said longtime property owners are victims of what he calls the “collateral damage of the wealthy.”

Chuan said such buyers have contributed to driving longtime residents off their properties.

At the same time, county assessment practices that have not been applied equally across the island have contributed to people being driven off the land, Chuan contended.

A representative for the county assessments division declined to comment on the accusation.

Speculation was once blamed for forcing people off the land, but it is no longer the case, Chuan said.

“The people who are paying these kinds of prices and are building big homes simply aren’t the type to speculate,” Chuan said. “They don’t have to speculate and make another half million.”

The buyers have a home on the mainland and keep a second home on Kaua’i, Chuan said.

The actual number of these types of buyers is small, but their buying activities dramatically affect assessments for longtime property owners, Chuan contends.

The buying practices have forced longtime Kauai families to sell prime rental properties, Chuan said. At Anini Beach, which has a mix of longterm rentals and vacation rentals, a local family saw its assessment increased by 300 percent this year, Chuan said.

Rather than convert their home into a vacation rental, the family decided to sell, Chuan said.

Speaking at the council’s pubic hearing, Arnold Nurock, a 30-year Anini Beach resident, said he will be driven off his property without the freezing of assessments and voiced support for Kouchi’s bill.

Chuan, Glenn Mickens of Kapa’a others suggested a rollback of the period of freezing assessments beyond what Kouchi has proposed.

Kouchi said the council will consider their suggestion.

“We are considering all the testimony, and we will look into it,” Kouchi said. ” For those kinds of issues, we need to get the information from the tax department on what the overall revenue impact will be,” Kouchi said.

Kouchi noted the council has passed legislation that is currently helping residents to stay on the land.

Jimenez said lower-income families with adjusted gross incomes of $40,000 or less would get an additional exemption of $55,00 off property valuations each year.

In addition, the council increased the yearly exemption for people who live in their homes from $40,000 to $48,000, Jimenez said.

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