Council to decide tax fate

LIHUE — The Kauai County Council will make final decisions on three of eight measures that seek relief for county taxpayers who saw noticeable increases on their real property tax bills this year.

One of those measures, Bill 2554, includes significant amendments that were introduced by councilmen Tim Bynum and Gary Hooser and approved unanimously during the seven-member board’s Oct. 1 Finance Committee meeting.

If approved, the bill would provide relief for properties that saw increases of $250 or more.

It would “provide tax credits for properties with home use exemptions which received substantial increases in their real property taxes due to the removal of the permanent home use tax cap, any changes in use, increases in various real property tax rates, and recalculation of their real property taxes based on current fair market values,” it states.

“I view this particular measure as being a foundation for the other measures,” Hooser said. “Many of the other measures would be moving forward, so if we were able to provide relief uniformly and fairly, then the other measures could be helpful for next year. I think we should do a good one and address those who have gotten this sudden surprise, and then we look forward with the more longer-term to apply for next year.”

The proposal could cost the county $1.9 million.

The initial version of the bill, put forth by Mayor Bernard Carvalho Jr. and his administration, sought to cap the amount of allowable increases at $500 and provide a 70 percent discount on the remaining amount above that threshold.

In all, the owners of 6,825 properties with home use exemptions in all tax classes received increases on their tax bills, according to county Department of Finance data. A total of 3,720 properties, or 54.5 percent of all properties that received increases, experienced tax hikes that were not greater than $250.

The owners of 5,912 properties with home use exemptions across all tax classes, meanwhile, received decreases on their real property tax bills.

“Even under the proposed reinstatement of the cap, it is very skewed to a very few number of owners,” County Finance Director Steve Hunt said. “The biggest relief, if we set a cap, most of the masses would be getting the full benefit of the $250 — probably that is, for many of them, their increase. Some of these increases were very low, so there is a big volume at the lower end of the scale that got increases, but then on the very high end — I would use the term outliers — those are the ones who got the massive increases. It’s not all local families — there a lot of wealthy families who don’t just have expensive properties that would be given a large break, too.”

In all, Hunt estimated that it would have cost between $725,000 and $750,000 to implement the administration’s proposal. The approved version with the lowered $250 maximum increase, meanwhile, will likely cost county taxpayers $1.9 million to implement, likely funded through the county’s reserve fund.

  • A second measure that is scheduled for final consideration today, Bill 2555, would allocate $750,000 from the county’s $4.9 million uncommitted reserve fund to implement any approved tax relief measures.
  • The council will also consider a recommendation from the Finance Committee to kill an active proposal, outlined in Bill 2556, that would reinstitute the repealed permanent home use tax credit, which capped future tax increases on owner-occupied homes at 2 percent.

The council will consider the three measures during their meeting today, beginning at 8:30 a.m. in the Historic County Building Council Chambers. Written testimony can be submitted to counciltestimony@kauai.gov.

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