Councilmembers debate use of surplus GET funds for housing

LIHUE — A bill proposed by Councilman Derek Kawakami to use some of the projected surplus from the recently passed General Excise Tax increase towards affordable housing was withdrawn following a heated, 20-minute argument during the county council meeting Wednesday.

Kawakami said he has talked to state legislative committees about the GET surplus, and they were open to the idea.

“I don’t know what the anticipated amount is,” Kawakami said. “I can tell you their budget was $20 million, I believe, and we’re looking at scooping $25 million from (the) GE surcharge and the existing highway fund is $16 million, so there’s a surplus and there’s a potential surplus.”

Not all council members agreed with his strategy as a solution to Kauai’s housing problem. Councilwoman JoAnn Yukimura said she didn’t understand where the surplus was coming from.

“The County of Kauai’s highway fund is $16 million and you’re saying we’re taking $25 million? I don’t get it,” Yukimura said. “We need money on top of what we’re getting now to replace our roads.”

There’s far more than $25 million in projects, Kawakami said. That figure is the budget for the fiscal year.

If the surplus from the GET hike, which is a half percent increase scheduled to take effect Jan. 1, 2019, isn’t needed for roads and transportation, Yukimura said it should be given back to the people.

“Why would we use a regressive tax when we could use a property tax, which is a progressive tax?” she asked.

Kawakami said she raised good points.

“I can tell you the burden of affordable housing is upon everybody, and I do not see a proposal for any type of property tax measure that you’re speaking of. So I’m trying to take a look at existing vehicles we may have,” Kawakami said.

There’s no guarantee that there will actually be a surplus from the GET, Kawakami said, but all they are asking for is that if there is, they could apply it to providing more affordable housing on Kauai.

Yukimura maintained there are more equitable sources, such as a capital gains tax on high-priced real estate transactions, rather than putting the burden on the backs of the poor and moderate-income people.

“So if we have a surplus,” Yukimura said, “we should return it to the people.”

Kawakami disagreed with Yukimura’s interpretation of his proposal, saying he was insulted that she thought he was putting the burden of affordable housing on the poor.

“This is politics at its worst. To characterize my initiative as putting our affordable housing initiatives on the backs of the poorest people, to me is insulting and it mischaracterizes my intent,” Kawakami said.

There are no other proposals on the table, he said, to find a solution to Kauai’s shortage of affordable housing.

Yukimura said she wasn’t questioning Kawakami’s intention, but rather the impact of what he was proposing.

She said this wasn’t the best way to solve the problem.

Some members of the public agreed.

“I see that it (the proposal) is the simple way to find money for affordable housing, but as JoAnn rightfully pointed out, this is one of the most regressive taxes,” said Lonnie Sykos.

Kawakami made a motion to withdraw his proposal, which was unanimously supported by the council. Council chair Mel Rapozo was not present.

His other two proposals, one to lower the vehicle weight tax by 1 cent per pound per vehicle and to reduce fuel tax by 4 cents per gallon passed through the first reading and will move forward in the process, with a public hearing scheduled.

  1. Steve Martin December 21, 2017 2:00 pm Reply

    JoAnn… The first thing you should realize is that using the increased excise tax for traffic issues as well as affordable housing is saying that all citizens are contributing to the cost of services. When you use property taxes you are only using the monies of the property owners. Many property owners live on tight budgets and for that reason should not be required to be your cash machine to fund your housing and traffic problems. Let’s try to cut more red tape that the county continually creates. Let’s start making those who continually use everything paid for by property owners taxes, find other means to support their needs. Our council is suppose to be non- partisan, but as any of us can see it’s as Democratic Party as it can get. Thank goodness that our president has and is reducing our taxes. We would be much better off if the council follows suite. Creativity is what’s needed and our council lacks it big time.

    1. Kamu December 24, 2017 11:25 pm Reply

      Steve you need to read about the Trump tax cuts better unless you are someone that’s in the one percent your tax cut is less than one percent. I don’t want to make an attack on your political view as construed as it may be. However by saying you support Trump and calling out the council for not being non- partisan but rather democratic is insane. I wouldnt like to say your comment is valid and true. Because of your lack of understanding the National tax cut that does not help the poor or working class. I believe your comment to be false, misinformed, and misleading. Please do not create an issue of separation of partys in our newspaper we live on a small island. Somehow we all need to work together. We are all neighbors we never say good bye we say a hui hoi. As far as affordable housing we all know that’ this entire chain of islands are suffering when it comes to locals having to leave because money isn’t easy. Working class people who have their roots in Hawaii are being forced to leave to lead better lives and hope to someday return.

  2. Steve Martin December 21, 2017 2:14 pm Reply

    Derek…… You are right … The excise tax increase means “all citizens” are contributing to the cost involved. Property taxes mean only property owners are paying for increase costs. Why wait a year for the increase? Why kick the can for another year? More money now means more improvements sooner. The increase should have been 2%. cut the tax on food, clothing, and medicine. We are tired of taking care of those who think we owe them a living. If you guys don’t step to the plate you will all end up with scuffed toes on your shoes. When are we going to see some change instead of the same old thing with Kauai Government.

  3. Lawaibob December 22, 2017 11:00 am Reply

    Talk about counting your chickens before they’ve hatched. Why is Rapozo always absent? How much we pay him?

    1. Sunrise_blue December 25, 2017 7:05 pm Reply

      Not pretty. He’s lost and blind as a bat. Cannot see or understand anything. Term limits were up a long time ago.

  4. Kapaa33 December 23, 2017 12:07 pm Reply

    Steve Martin,

    I totally agree with your comments. Kudos to Derek for taking the lead on roads, traffic, and affordable housing which has been identified by the” Public Voters ” as the top 3 priorities. Knowing and identifying the problem has no merit if there is no proposed solutions.

    One question for the tax pro’s on the council……. What is a regressive tax?

    Example 1. A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases. “Regressive” describes a distribution effect on income or expenditure, referring to the way the rate progresses from high to low, so that the average tax rate exceeds the marginal tax rate.
    Example 2. A tax rate where the wealthy pay less taxes than the lower income. Ref: wiki encyclopedia and Google.

    Everyone on Kaua’i, tourists and residents would be taxed at the same rate. So it’s a fair tax that would be spread amongst all.

    The tax proposed could incorporate fixing and expanding roads and road conditions and if there is a surplus, affordable housing would be the next on the list.

    Simple formula. Without finances projects cannot be funded.

  5. MisterM December 23, 2017 4:15 pm Reply

    Baffling. I thought the entire rational for the extra 0.5% tax was to fund badly underfunded road improvements (the claim was it was underfunded by at least $100M) And yet as soon as it’s passed, this Kawakami nitwit wants to siphon some imaginary surplus to affordable housing?? These sort of shenanigans are what makes voters so cynical.

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