Mayor Bryan J. Baptiste yesterday sent to members of the Kaua‘i County Council a $119.5-million supplemental budget that includes what he believes is the largest proposed reduction in real-property-tax rates in county history. Baptiste recommended the council approve a $1.25
Mayor Bryan J. Baptiste yesterday sent to members of the Kaua‘i County Council a $119.5-million supplemental budget that includes what he believes is the largest proposed reduction in real-property-tax rates in county history.
Baptiste recommended the council approve a $1.25 tax-rate decrease (per each $1,000 of assessed value) on the land portion of tax bills for all eight county tax categories.
If approved, the lower tax rate would provide significant tax relief to all property owners on the island, Baptiste said in a supplemental budget message sent to council Chairman Kaipo Asing.
With county leaders anticipating a $10.5-million increase in property-tax revenues for the 2004-2005 county budget, due to spiraling assessments fueled by a hot real-estate market, the reduction seems timely and needed, Baptiste said.
If councilmembers adopt the proposal, the land tax rate, for instance, for commercial properties, would drop from $8.20 to $6.95 for every $1,000 of assessed valuation.
Of all eight tax categories, the commercial properties, apartments and industrial properties are assessed the highest tax rates, currently at $8.20.
The homestead class, which includes those who own their homes and live in their homes, are assessed the lowest land tax rate, at $4 for every thousand dollars of valuation, currently.
By the same token, the building tax rates remain the same for all eight tax categories.
They include homestead, single-family residential, apartment, commercial, industrial, agricultural, conservation, and hotel and resort.
Baptiste said in his initial, $124.9-million operating budget he sent to the council on March 15, he recommended a 2-percent cap on yearly tax bills to further support council efforts to provide tax relief.
“However, I now believe that it is absolutely necessary for the county to provide immediate tax rate relief to offset escalating property values across the remaining tax classifications,” Baptiste wrote.
The land tax-rate reduction takes into account that land values have “risen exponentially in the past 12 months,” Baptiste said.
Those increases “are the primary reason for the tremendous increase in property assessments,” Baptiste said.
The reduction moves along the lines of a key recommendation by a county tax task force, that assessments of buildings should be higher than that of the land.
Right now, the tax system gives higher value to the land than to buildings. The change, if it occurs, would require folks who build larger homes to pay more in taxes, although their land taxes would be less.
The lower land tax, if approved by the council, would allow long-time kama‘aina families to keep vacant lands that have been “passed on within their families for generations,” Baptiste wrote.
Baptiste also commended councilmembers for enacting measures that already provide tax relief to homeowners and farmers. The measures include extending the circuit-breaker credit program for lower-in-come home owners, increasing the homeowners’ and additional-income exemption, expanding a permanent-home-use dedication program and passing a new agricultural home-site law.
Baptiste said he initially submitted a $124.9-million operating budget, but noted he had no intention of using all $10.5 million in revenues that would be generated by status-quo tax rates attached to spiraling property values and assessments.
Baptiste recommended some of the funds be used for more tax relief, and for the rehabilitation of the county sewer system and other county facilities.
Baptiste’s revised, $119.5-million budget apparently reflects a reduction in the land-tax-rate proposal.
The supplemental budget reflects his philosophy “to increase fiscal restraint and accountability to our taxpayers,” Baptiste wrote.
County leaders anticipate receiving more property-tax revenues in fiscal year 2005-2006, also, he said.
Certification of the real-property-tax assessments shows an increase of $2.4 million over the estimates made in the March 15 budget.
County leaders anticipated at that time receiving about $70 million in real-property taxes.
In March, the mayor had also submitted a $15.7-million capital-improvement-projects budget, but is now proposing a $19.7-million budget.
Members of his administration are asking for $4.25 million more in that budget to acquire additional land to continue expanding the county’s affordable-housing inventory, and to make improvements to the scenic Maluhia Road (tree tunnel road) in Koloa.
He is also asking for an additional $1.6 million to refinance some of the county’s existing debt. He also said it is prudent for county leaders to take advantage of current interest rates to refinance $10.5 million of their existing, $45.8-million debt.
In addition, staggering growth in the real-estate market makes the issuance of “new, 25-year repayment bonds to complete deferred projects, and to construct new facilities, very cost-effective.” The improved projects under consideration for a new bond issue include a new landfill, three new regional parks for the west, central and north sides of the island, a new fire station in Kapa‘a, and lighting and other improvements at the Lihu‘e ball park behind Wilcox Elementary School.
- Lester Chang, staff writer, may be reached at 245-3681 (ext. 225) or lchang@pulitzer.net.the Senate may call for a special reorganizational meeting without calling for a special session, Hooser said there still may be need for a special session if Lingle decides to veto certain legislation just passed.
