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Taxing times

LIHUE — Allan Leonard said he wasn’t sure what to expect when he received his real property tax bill earlier this month.

The Princeville resident said he expected some type of increase but didn’t expect to see a 34-percent jump in the amount of taxes he must pay this year compared to last year.

Though Leonard said he would be able to pay his real property taxes this year, he declined to say how much that increase amounted to. Leonard said he is upset by the spending and taxing habits of some county officials.

“There are certainly people who are in worse, dire straits than I am,” said Leonard, who has lived on Kauai for the past 13 years. “It seriously affects people on fixed income and it’s an unfair tax burden. The government takes care of themselves very well, and the taxes become more of a class then they used to be. They’re going to find the piggy bank and the piggy bank seems to be the property owners.”

County officials say Leonard is a part of the 5,293 property owners in the county’s homestead class who received increases on their real property taxes this year. Another 5,651 people, according to Department of Finance data, received decreases on their tax returns.

Only 32 properties saw no changes on this year’s tax bill compared to last year.

County officials say they will seek to provide some context behind these numbers, and talk about bringing some tax relief to some property owners, during a workshop from 9 a.m. to 1 p.m. Thursday in the Historic County Building Council Chambers.

“We will be presenting some comprehensive background information on the changes that were made and how they impacted the various classes overall, as well as providing specific examples so that the County Council and the public can better understand how the changes were applied in various circumstances,” County Finance Director Steve Hunt wrote in an email. “We will also be discussing some thoughts on temporary relief measures that could assist those who saw the biggest dollar increases.”

But that doesn’t necessarily mean that relief may come for everyone, because the county’s now repealed permanent home use tax credit disproportionately shielded some residents from higher taxes, Hunt said. That tax credit, which was rolled back by the Kauai County Council last year, capped future tax increases on owner-occupied homes, with the proper tax exemptions, at 2 percent beginning in 2006.

“There are going to be people who have all of their (tax) exemptions, are in the right (tax) classes, but just got tax increases maybe because they were artificially too low — some neighborhoods that started with their taxes really low and are just now up to market,” Hunt explained. “We are — even at market taxes, even with the lifting of the cap — still doing a lot better than some of the other counties to provide lower taxes for homeowners.”

Councilman Ross Kagawa, who proposed the real property tax workshop with Council Chair Jay Furfaro, said residents with second homes on their properties for other family members have been hit particularly hard by tax increases this year.

“What’s happening is that, under the old system, the (permanent home use) cap protected them, but now, it’s almost like the county now assumes that you’re rich, if they have two units on their property, like a house and an additional dwelling unit, so they tax you at a really high level compared to the past,” Kagawa said. “Everybody knows that, traditionally, local style is that you build another house on your lot, if you have one that’s over 10,000 square feet, and that’s normally for your children or what have you. That’s how local people get to take care of their kids.”

Wailua Homesteads resident Gini Martin said she felt the pain of having her taxes go up last year after county officials removed her homestead exemption and charged her a commercial tax rate, because she operates Merry-Go-Round preschool out of an adjoining building on her property.

But a tax exemption approved last year for licensed day care centers allowed her to obtain a homestead exemption this year.

Though the property taxes on her home dropped by $2,410.44, the taxes that she pays on an additional dwelling unit on the same property increased from $2,832 to $3,271 between last year and this year.

Martin said she would like county officials to communicate changes in tax laws with property owners better.

“We’re getting our tax bills but we don’t know what the change is about,” Martin said. “The changes are being made without any of us homeowners knowing anything — we’re blindfolded unless you go in and read the new laws every day, and I have a busy schedule here from Monday through Friday.”


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