West Hawaii residents Thursday evening offered Mayor Billy Kenoi alternatives to raising property taxes, ranging from implementing a fire or police tax to charging an annual parks user fee.
Attendees of a meeting with Kenoi at the West Hawaii Civic Center also wanted to know what the administration was doing with recommendations from a property tax study, especially about how the county was going to address perceived inequities in the tax code.
“Why should someone with a great big house on ag land get away with paying less because they got a house on ag land?” Kona resident Cheryl King asked.
Finance Director Nancy Crawford said a real property tax review task force is looking at the agricultural classification first.
Kenoi explained why the county needs to keep some exemption for agricultural land.
“It’s a very generous exemption,” Kenoi said. “The county provides over $30 million in tax breaks. If we don’t incentivize agricultural production, we’re going to lose this beautiful island. This is one special, wide-open, beautiful island. That’s because ranchers ranch and farmers farm. But people abuse it.”
The mayor acknowledged that while property valuations have dropped since he took office — the county collected $225.9 million in 2008 and will collect $198.3 million this year — those values will eventually increase. One meeting attendee asked Kenoi to consider placing a time limit on the property tax rate increase.
“That’s something we can take a look at,” he said.
Another attendee questioned the $100 minimum property tax, and how much revenue even doubling that to $200 a year could raise. Kenoi and Crawford said they couldn’t give an exact figure Thursday, although they have studied it in the past. Credit unions are one type of property owner that pay that minimum tax, he said. Taxing credit unions at the commercial rate might raise about $240,000.
But when he considered increasing the amount, even as a symbolic gesture, “people said, you’re raising taxes on disabled veterans? There’s a push back on the other end,” he said.
The county can’t increase the general excise tax, because it doesn’t have the authority to do so, Kenoi added.
Parks and Recreation Department officials ask for fee increases each budget cycle, Kenoi said. He and other administration officials review the request facility by facility each year. While some people may be willing to pay, say, an annual fee to use the county pools, putting a user pass system in place also raises the county’s personnel costs, Deputy Parks and Recreation Director Bob Fitzgerald said.
Kenoi said he also hears some criticism whenever such fee increases are proposed.
“Guys go, ‘we pay our property taxes, the property taxes is supposed to pay for parks and rec and the services,’” Kenoi said. “‘It’s supposed to be free. We paid for this already.’ It’s a philosophical decision. Do we charge property taxes and user fees? Some people say we should.”
Kenoi is proposing increasing property taxes by about 10 percent in most categories, except for the conservation class. His budget for next year is $394.3 million, which is up from last year. This was his first proposed increase since taking office in 2008.
Big Island residents are paying the lowest per person for county government in the state, Kenoi’s budget fact sheet said. The average cost per person in Hawaii County is $1,930. City and County of Honolulu is $2,012, Kauai is $2,431 and Maui County is $2,604.
“We’re not buying what we want,” Kenoi said, during a meeting at the West Hawaii Civic Center. “We’re getting what we need, providing critical, core, county government services.”