Council debates property tax reform

Most of the speakers at the Kaua’i County Council public hearing yesterday spoke out in favor of an earlier bill proposing assessment rollbacks to allow longtime property owners to remain in their homes.

During the hearing at the historic County Building, supporters of a bill initially introduced by former council chair Ron Kouchi said they liked the bill because it would roll back property assessments at least two years.

They also said the bill, if adopted, would provide guaranteed property tax revenues in the future to keep public services going. That bill applied to more tax categories – single-family, residential, agricultural and homestead classes.

The second bill, the subject of the hearing and introduced by former Mayor Maryanne Kusaka’s administration, would provide relief to people in the homestead class.

Both bills were generated in response to significant increases in property sales to mainland buyers over the last four years.

As a result, longtime residents face the reality of being taxed off their properties.

Residents at the meeting objected to the latest bill, complaining the bill would require citizens to provide sensitive income tax information to the county, contained loopholes and would not tax fairly the wealthy.

The bill, if adopted into law, would “break the county” said Ray Chuan, who requested the council reconsider Kouchi’s bill to freeze assessments and Prop. 13 tax relief that have benefited California residents for more than two decades.

The second bill would limit the taxes in the homestead classes to a percentage of the adjusted gross income of the household.

The amendment proposes a homeowner will be entitled to a credit or refund “in the amount that the real property tax assessment on the homeowner’s property exceeds three percent of the household.”

Councilmembers Daryl Kaneshiro and JoAnn Yukimura said critics of the bill were mistaken if they thought tax payments would be based on income.

They said it would work in this way.

In the case of a homeowner who owns property that is hypothetically valued at $100,000 and hypothetically makes $30,000 a year and paid $1000 in property taxes last year, the owner, based on a three-percent cap of his income, would pay $900 the next year, with a $100 credit applied to next year’s tax bill.

Both bills would help those who live in their homes a long time, have no intention of selling, but have seen their assessments jump continuously because of new construction or repeated home purchases around them.

If the same homeowner pays less than the $900 tax bill, he would not have to apply for the property tax break, Kaneshiro said.

Other speakers said both bills should be scrapped and that a new one should be introduced.

Staff writer Lester Chang can be reached at 245-3681 (ext. 225) and


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