LIHUE — It has been over a week and a half since the County of Kauai sent out property tax bills to the owners of 33,370 individual properties on the island.
And for most of that time, some Kauai County Councilmembers have said an influx of emails and phone calls have been coming in — on the other end, in many cases, are disgruntled property owners who have seen noticeable increases on their tax bills.
It’s a result most councilmembers said they didn’t see coming.
“Obviously there’s a big problem,” said Councilman Mel Rapozo, who has heard from property owners who saw their tax bills jump hundreds, if not thousands, of dollars. “This is the perfect example of unintended consequences and something needs to be done. This cannot continue — people are going to lose their homes.”
Residents on a few of those occasions, he said, have said that they will likely sell their homes or properties because they cannot afford to pay their property tax bills.
Though county officials say there are many variables that may have caused property taxes to increase so dramatically, many councilmembers agree that plans for a public tax workshop will help address the problems that residents are now facing.
A measure recommended by county finance officials and approved by the County Council last year attempted to overhaul many real property tax laws. Among those changes was the removal of the permanent home use tax credit, which capped future real property tax increases for owner-occupied homes by 2 percent beginning in 2006.
“The fact that some of the things that they (the administration) made assumptions on were clearly incorrect,” said Council Chair Jay Furfaro, who along with fellow Councilman Ross Kagawa, will introduce a proposal next week for a public tax workshop that would include members of Mayor Bernard Carvalho’s administration. “I think that, out of the workshop, we’d like to come up with evaluated pieces that are the most fair and equitable — and fair and equitable cannot be a blanket cover all.”
Councilman Gary Hooser agreed and said some of the financial projections made at that time were incorrect — assessed property values, instead of increasing slightly or leveling out, jumped up significantly for some homeowners.
“No one should be subject to sudden, large and unexpected increases,” Hooser said. “If taxes are going to go up, they should be done gradually.”
Of most concern, Hooser said, are those who are retired, live on fixed incomes and cannot afford substantial increases on their property taxes.
“There’s clearly a huge problem and we need to tackle that issue immediately and not wait until next year,” Hooser said. “We need to tackle this issue right away. It’s a question of equity — we have to make sure that people who live in their homes and older people on fixed incomes are protected and that large, large businesses should pay their fair share.”
Councilwoman JoAnn Yukimura said she has received her own share of calls from distressed residents and has been researching individual cases to find out why, in some cases, real property tax bills increased so dramatically compared to last year.
A workshop, she added, would be beneficial because it would allow residents to see what types of real property tax credits and home exemptions are available under recently revised tax laws.
“I know that, in crafting this new system, there was a lot of thought to offset some of the increases and mitigate situations for owner-occupants and that kind of thing,” Yukimura said. “So if people don’t know how to use the new system, part of it is just educating them about it.”
Though a majority of the county councilmembers voted in favor of the tax law revisions last year, Yukimura said it would have been difficult to predict all outcomes from the changes.
“We’re always trying to look for equity, fairness and affordability, but sometimes we look at how many people are going to be affected and we don’t look at every single situation, so we may overlook certain things,” Yukimura said. “It’s not an easy task, but I think the intention is always to not overtax people and get enough revenues in a fair way.”
Councilman Ross Kagawa said the removal of the cap opened a can of worms.
“I think, in hindsight, we shouldn’t have removed the cap without additional information from the administration,” he said.
“You cannot make our local people pay more than they can afford, because what does that lead to? That leads to them selling their homes and letting people from the Mainland gobble it up,” Kagawa said. “Yeah, we have to deal with higher costs, but we can’t place unreasonable taxes on people. We cannot make government as big as we want and then rely on taxpayers.”