Tax relief ahead?

LIHUE — At least three Kauai County Councilmembers have said they are looking at ways to provide immediate relief for residents who have experienced sizable property tax increases. 

Several of those options, put forth by Councilmen Gary Hooser, Mel Rapozo and Ross Kagawa, include rolling back real property taxes to last year’s amount and reinstituting the permanent home use tax credit, which capped future real property tax increases on owner-occupied homes at 2 percent beginning in 2006. 

“Some of the stories that I’m hearing now are just incredible,” Rapozo said. “I don’t see how these people are going to afford to pay their taxes.”

Over the past two weeks, some residents, especially those on the North Shore, have reported noticeable jumps on their real property tax bills — some of which were hundreds, if not thousands, of dollars higher than last year’s bill.

“We were led to believe that assessments were not going to go up significantly and that by following the suggestion of the administration … some taxes were expected to go up a little bit and some would go down a little bit but that there would not be these large variances that we’re seeing today, so I’m very unhappy that we were led to believe one thing and something else has clearly occurred,” Hooser said. 

Councilman Tim Bynum, however, defended the tax law changes proposed by Mayor Bernard Carvalho Jr.’s administration and approved by the County Council last year.

Those changes, which included eliminating the permanent home use tax credit and creating a new program, called the Home Preservation Tax Limit, provided relief to 5,000 owner-occupied properties that paid a disproportionate amount of taxes compared to neighboring homes.

Many county officials, like Rapozo and Hooser, say they are searching for solutions that would make the entire real property tax system more equitable for island residents. Some of them have said that something must be done to provide immediate tax relief. 

“It’s not about blame — it’s about fixing it,” Hooser said. “All seven council members, the mayor and the tax office all share responsibility.”

Though he supports a proposal by Council Chair Jay Furfaro and Kagawa for a public real property tax workshop with Carvalho’s administration, Rapozo said he wants to rollback property taxes to last year’s amount.

“I know if we rollback this year’s tax bill to last year’s bill, it’s going to cause a problem with the budget, but that’s just something that we’re going to have to address and deal with,” Rapozo said. “I couldn’t tell you what the fix is right now, but it’s going to be a combination of some creative revenue enhancements but also some cuts in our spending.” 

Hooser said he supports the idea and said that a rollback option, at the very least, should be provided for future tax years.   

“We should leave no stone unturned and look for ways to find people relief immediately,” Hooser said. “I’m not convinced that we can’t fix something this year. We make the law, so for someone to say that people can’t appeal or can’t do this or can’t do that is because that’s how the existing law reads.” 

Kagawa said he would like to reinstitute the real property tax cap that tied future increases to the previous year’s tax bill rather than a property’s assessed value.

County spokeswoman Beth Tokioka said Carvalho and his administration are willing to consider tax law changes at the proposed public tax workshop. If it is approved by the County Council during their Wednesday meeting, it would be likely held later this month.

But making such changes, she cautioned, may have other consequences. 

“Our finance team has been in discussions with councilmembers, as well as with the mayor, to discuss many different alternatives that might be available,” Tokioka wrote in an email. “We are open to ideas, but all concerned must be mindful that any additional tax relief that is granted this year must be met with a corresponding budget cut or shift of that tax burden to another class in order to maintain a balanced budget.”

Councilwoman JoAnn Yukimura agreed.

“We have such a tight budget,” Yukimura said in response to property tax rollback suggestions. “I think people need to be careful of what they suggest unless they know what the consequences are. I don’t think it’s going to be possible without some really severe cutting, so whoever suggests that has to have the other side of it.”

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