Guest Viewpoint for Saturday — May 29, 2004

• Reply to Ohana Kauai

Reply to Ohana Kauai

By Lowell Kalapa

I believe that a response to Walter Lewis’ commentary in the May 20, 2004 TGI is imperative to put the truth on the table.

While it may be true that county spending rose by 45% between 1998 and 2004, one must ask who is responsible for allowing that increase to occur? Certainly the elected officials that have the power to spend that money. But who puts those people in office? And who berates these elected officials for more county services? The amount of taxes raised is driven by the cost of the services provided. If taxes are too high, then the only way to lower those tax burdens is to reduce the burden of spending that demands those taxes.

Conversely, spending cuts or reductions have to be driven by the acceptance on the part of residents to do without a certain project or program. Thus, the Ohana Kauai proposal does nothing to curtail the spending indicating that they like the amount of spending but are not willing to pay for that spending. They want someone else to pay for it.

Without curtailing spending the burden will be shifted to nonresidential properties and new homeowners, the next generation of Kaua‘i residents. Where does Ohana Kauai believe those businesses will get the money to pay the higher property tax bills with which they will be saddled?

Hopefully members of Ohana Kauai don’t eat and therefore don’t shop for food at the local grocery store or go to the dentist for their semiannual teeth cleaning or need clothes from the local department store. Businesses like grocers, professionals, and department stores will pass the added cost on to homeowners.

Ohana Kauai would like to pass on the cost to nonresident investors, time shares, hotels, and vacation rentals. Who are these nonresident investors? Will they become the next door neighbor of an Ohana Kauai member and enjoy the windfall of having their property taxes frozen while some resident’s kid gets married in ten years and ends up paying a disproportionate share of the property tax burden because they moved out of Mom and Dad’s house to buy their own home?

Time shares and hotels? Just where do the residents of Kaua‘i work? Higher property taxes make a stay at a Kaua‘i resort more expensive in an increasingly competitive global tourism marketplace. If higher prices make Kaua‘i less competitive and the number of visitors drops, will Kaua‘i residents have the jobs they need? Attracting new investment in our community helps to create the jobs Kaua‘i residents need.

As stated many times before, if Kaua‘i residents want to hold the line on taxes then holding the line on spending must come first. That means determining what services Kaua‘i residents want to do without. Sure we would all like to have more services, cleaner beach parks, more police officers to patrol our neighborhoods, more bathrooms in the parks and so on. But all of that costs money. So one must ask what services do members of Ohana Kauai want to give up? Or is the Ohana Kauai proposition merely a way to get someone else to pay for the services they enjoy?

Absolving themselves from participating in the rising cost of government insures that members of Ohana Kauai will enjoy the best of county services at someone else’s expense. Unfortunately, shifting the cost to not so favored properties, like businesses, insures that the cost will be passed back to all residents in the form of higher prices, fewer jobs and less opportunities for wage increases.

Finally, I take great umbrage in the castigation that my opinion is influenced by businesses that fund the Tax Foundation of Hawaii. People that know me and the Foundation know that is the furthest thing from the truth. Mr. Lewis and all of the Ohana Kauai should know that although the Kaua‘i Chamber of Commerce sponsored the recent workshop that I moderated, the Tax Foundation of Hawaii does not receive a single penny from the Kaua‘i Chamber of Commerce nor for that matter any other Chamber of Commerce in the state.

The Tax Foundation of Hawaii is supported by individuals and businesses who respect the integrity of the Foundation and provide that support unconditionally knowing that the Foundation stands for fairness in taxation. Yes, there are businesses that expect the organizations they support to sing their tune, but a review of our membership list will reveal those businesses that expect a dance for their dime, as they are absent from the Tax Foundation membership.

Lowell Kalapa is President of the Tax Foundation of Hawaii