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use some of the projected surplus from the recently passed General Excise Tax increase towards affordable housing was withdrawn following a heated, 20-minute argument during the county council meeting Wednesday.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.