The Kaua‘i County Council will shelve a tax reform plan proposed by a county task force if voters approve Ohana Kaua‘i’s charter amendment ballot measure in the Nov. 2 General Election, residents were told last night. The comment came at
The Kaua‘i County Council will shelve a tax reform plan proposed by a county task force if voters approve Ohana Kaua‘i’s charter amendment ballot measure in the Nov. 2 General Election, residents were told last night.
The comment came at a public hearing held at the historic County Building on a property tax reform bill based on the Real Property Tax Task force’s findings.
At the public hearing, Councilman Jay Furfaro said approval of the Ohana Kauai charter amendment would mean the plan would “be put on the shelf.”
“It would mean we move on. Pau (on any more plans to implement the tax plan advanced by county’s Real Property Tax Task force),” Furfaro said during a break in the public hearing.
The council held the hearing to get input on a bill based on the task force’s recommendations.
The proposal by Ohana Kauai, which has secured sufficient signatures to place the initiative on the election ballot, proposes to reduce property taxes for residents who occupy their homes to the tax amount they paid in 1998-1999.
The initiative also proposes to limit tax increases to 2 percent a year in 2006, a year after the proposal takes effect.
Some of the ten residents who testified early on said the county’s task force plan appeared complicated and confusing, and wanted clarification. Others supported it but wondered whether or not the measure could help farmers and owners of agricultural lands.
Dottie Beckart, a former finance director for Kaua‘i County and a representative for the county task force, and Mike Dyer, a former member of the task force, said the bill, if passed into law, would provide for “fair and equitable taxing” of island properties.
Beckart said she felt the proposal was easy to implement and would be easily understood by property owners.
She stressed the proposal, if implemented through legislation, would eliminate the threat to longtime owners of being taxed out of their homes.
She said the main points of the proposal would “divorce the assessments” of properties from the real estate market; emphasize the building values by requiring that the tax rates for buildings be three times the tax rate for land and do away with eight tax classes, leaving only two classes.
The biggest change calls for levying higher taxes on structures and lower taxes on the land. If this change is approved, longtime property owners with large parcels with modest homes would be paying lower taxes.
People wanting to build larger homes would pay higher taxes.
Currently, the land portion is taxed high, and the building portion is taxed low.
This situation has created problems for longtime residents who own properties and live in areas of the island where high-priced sales, and sometimes repeat sales, have occurred.
The bill also calls for:
- Establishing land assessments of each property at a four-year average from 1999 to 2003;
- Subsequently basing the yearly land assessment on the latest Honolulu Consumer Price Index;
- Allowing an owner to cancel an agricultural dedication without penalty or rollback during a two-year amnesty period.
Some residents are concerned that if the charter amendment is approved in the Nov. 2 election, it cannot be altered or repealed through a law, and can only be changed by the voters in a future charter amendment ballot measure.
John Hoff, a member of Ohana Kauai and a candidate in the 15th House District race against incumbent House Rep. Ezra Kanoho, came out in support of the charter amendment.
Some charter amendment proponents have said the measure would significantly help property owners, who pay the majority of the property tax revenues.
Ohana Kauai members said any loss of county revenues provided to homeowners could be made up through taxing of commercial and industrial properties.
The bill will be sent back to a council committee for review and further discussion.
Lester Chang, staff writer, can be reached at 245-3681 (ext. 225) and lchang@pulitzer.net
