LIHU‘E — In the next few days, the administration will be looking into different property tax rate scenarios, and the outcome could include a proposal to raise taxes, county officials told the Kaua‘i County Council Tuesday during a budgetary review
LIHU‘E — In the next few days, the administration will be looking into different property tax rate scenarios, and the outcome could include a proposal to raise taxes, county officials told the Kaua‘i County Council Tuesday during a budgetary review meeting for Fiscal Year 2013, which starts July 1.
Any proposal from the administration has to be approved by the council. But some council members complained of insufficient tax data provided by the administration, while others said it’s too early to be proposing tax rates because the council has first to set percentages that each class of taxpayers has to contribute to the total tax revenue.
“Philosophically, single-family residential (tax class) has always paid too little in terms of their rate,” said county Real Property Review Officer Steve Hunt, explaining that years ago, the single-family residential tax class was lumped together with the homestead class. When those classes were separated into different categories, their taxes rates remained similar, he said.
“The single-family rate, at the rates they’re at right now, potentially has the most ability to change if we were looking to increase tax rates,” Hunt said.
Part of Hunt’s presentation to the council included a hypothetical increase of 20 cents across the board for all classes of taxpayers, bringing in more than $1.28 million in additional tax revenues to the county General Fund.
County Finance Director Wally Rezentes Jr. said in the next 10 days the administration would be testing different tax scenarios in their software.
“Is that something that we can expect from the administration, a proposal that the tax rates will be increased?” Councilman Mel Rapozo said.
Rezentes said the administration will “definitely” look at all tax-rate options, but the ultimate decision would come from Mayor Bernard Carvalho Jr.
Rapozo said it is “very premature” to be discussing rates because the Kaua‘i County Code mandates the council to set percentages, not rates, that each tax class has to pay in relation to the entire county’s property tax revenue.
“We don’t set the rates, we set the percentages,” Rapozo said. “We’ve got to set the percentages (that each tax class pays) and then the rates will follow.”
Based on the budget for FY 2013, which includes millions of dollars in requests for new positions and equipment, he said he doesn’t think raising taxes is justified.
“We should be looking at reducing some of these high-cost items rather than raising taxes,” Rapozo said.
Councilman Tim Bynum’s gripe with the administration was due to an apparent lack of sufficient tax data, which should be provided by the administration to the council.
“It’s impossible for the council to make an important decision because we don’t have the data,” said Bynum, adding that he has been “cajoling, begging” for information, and it’s irresponsible for the council to make fundamental tax decisions without fundamental, accurate data.
“I should be able to know, to the penny, how will it impact resident-homeowners, how will it impact each class and each individual taxpayer in this county,” Bynum said. “It’s very upsetting to me that after three years of having this discussion we can’t have that data.”
Hunt said he provided the council with data in a spreadsheet April 4, containing all the tax parcels in the county and their estimated taxes.
The data, however, is not accessible and it’s impossible for council members to make calculations based on it, according to Bynum.
Years ago, the council set a 2 percent cap for resident homeowners to protect them from rising market prices. But the cap — now based on Honolulu’s Consumer Price Index — and additional tax credits make it impossible to calculate taxpayer classes’ percentages in different scenarios, because the capped amount changes with each proposed tax rate, according to Hunt.
“Maybe the caps needs to be phased out,” Councilman KipuKai Kuali‘i said.
Council Vice Chair JoAnn Yukimura was also concerned about the administration recommending new tax rates without having accurate data.
The only way to figure out how different tax scenarios would affect distinct tax classes, Hunt said, is to first run those different scenarios through the current software. The process takes about one-and-a-half hours each time, and the administration is planning to do it in the next few days with the help of an information technology professional, he said.
Council Chair Jay Furfaro said, if needed, the council would provide necessary funding for new software that would allow “the most accurate information possible.”
“I’m trying to keep my frustration in check,” said Bynum, adding that a year ago, Hunt told the council the software used by the administration would not give the data.
Hunt said even if the current software was reprogrammed, it would be “very unlikely” to give the council the data on time to set rates for this year.
Bynum said he has a thick file in his office labeled “too late,” and for the last year and a half he has been asking the administration to fix the software.
“It’s too late to do it this year, I agree with you,” Bynum told Hunt. “But it wasn’t too late to do it when you had a year to get it done.”
Go to www.kauai.gov for more information.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@ thegardenisland.com.
