LIHUE — The Kauai County Council on Tuesday approved a broad swath of spending measures, cuts and tax increases to level out the county’s budget over the next fiscal year.
What that will likely mean for residents are increases in real property taxes across five categories. Those categories range from a 30-cent increase for homeowners in the county’s residential class to a $1.85 increase for hotel and resort class properties per $1,000 in assessed valuation.
This would, in turn, raise the annual tax bill on a $454,000 home — in the county’s residential class — from $2,610.50 to $2,746.70.
In all, these property tax increases, which were approved by a 5-1 vote by the County Council, will generate just under $8 million in additional revenue for the county. Councilman Mel Rapozo cast the lone dissenting vote against the real property tax rate increases. Councilman Tim Bynum, who cast a silent vote on the proposal, sided with a majority of the seven-member board. Councilman Ross Kagawa was absent and did not vote on the rate increases.
Property owners who fall within the county’s homestead, agricultural and conservation classes, however, will not see any increases on their property tax bill during the upcoming 2014-2015 fiscal year, which begins on July 1.
The homestead class is defined as an owner’s principal residence. Residential class, meanwhile, is defined as homes in residential neighborhoods that are not owner-occupied, like rentals.
“I don’t think we should go beyond what we need to do when it comes down to taxes,” Rapozo said before casting his vote. “I think we should tax where we need to tax our citizens so we can get a balanced budget, move forward and work internally with departments to become more efficient so we can save that money next year down the road.”
The county was facing a roughly $6 million shortfall as it balanced the fiscal year 2015 budget. While the council approved the increases Tuesday, it must approve other tax and fee increases today to officially balance the county’s $182.3 million budget, which includes $4 million in raises for employees.
Three other real property tax rate proposals, including one that was issued by Mayor Bernard Carvalho, Jr.’s administration, were rejected by the County Council.
One of those proposals, introduced by Bynum, would have lowered tax rates for homestead class properties by 50 cents to $2.55 per $1,000 in valuation but increase tax rates across all other property classes, ranging from 10 cent per $1,000 in valuation for commercial and industrial properties to $2 per $1,000 in valuation for hotel and resort properties. Residential properties would have also experienced a 35-cent increase to $6.10 per $1,000 in valuation under Bynum’s proposal.
“I’m really disappointed that we were not able to provide some tax relief for homestead owners,” Bynum said after Tuesday’s meeting.
A separate proposal, introduced by Rapozo, would have increased real property tax rates for vacation rental and hotel and resort classes only by $1 per $1,000 in valuation — a move that would have raised $4.7 million in additional revenue.
The mayor’s proposal, on the other hand, would have raised real property tax rates for hotel and resort properties only from $9 to $11 per $1,000 in valuation, which would have generated about $4.3 million in additional revenue for the county.
“While I don’t agree with some actions taken, I appreciate the dialogue and the opportunity to participate in the decision making sessions,” Carvalho wrote in an email.
• Darin Moriki, county government reporter, can be reached at 245-0428 or email@example.com.