Council nixes foreclosure bill

HILO — Property tax scofflaws got a reprieve Wednesday, when a County Council committee declined to shorten the time the county has to wait before foreclosing on property.

The council Finance Committee voted 7-1 to postpone the measure that would have allowed the county to foreclose on property when taxes are two years past due, instead of the three years that is current law. The bill sponsor, Councilwoman Brenda Ford of South Kona/Ka‘u, voted no and Hilo Councilman Dennis Onishi was absent.

“We’re facing a real property tax increase … that’s on the backs of people who are paying their taxes and that isn’t fair,” Ford said. “It isn’t that I want to foreclose on people. I want them to pay their taxes.”

The County Council is scheduled to vote on property tax increases of just over 10 percent at a meeting that starts at 8 a.m. today in Hilo council chambers. The council is also slated to finalize the county operating and capital improvement budgets.

The public can testify on the tax hikes and budget in Hilo or by videoconference from the West Hawaii Civic Center, Hawaiian Ocean View Estates Community Center or the Waimea or Pahoa council offices.

The foreclosure change would add an estimated $3 million to county coffers in two years and as much as $6 million the following year.

Council members opposing the measure said people probably don’t pay their taxes on time because they don’t have the money. They’re also paying 12 percent interest on the balance as well as penalties, they noted.

“We’re trying (with this bill) to get the money as fast as possible from people who are having a hard time,” said Puna Councilman Greggor Ilagan. “That’s why they had to be foreclosed.”

“It’s challenging just to have the conversation of raising property taxes,” said Puna Councilman Zendo Kern. “It’s a greater challenge to modify the foreclosure procedure and put people out of their homes.”

Kohala Councilwoman Margaret Wille was torn. She urged the council to postpone a decision until a property tax task force could be formed to look into it. The task force issue is scheduled for an upcoming council meeting.

“There are legitimate concerns on both sides. If we don’t get it, we do have to raise taxes for everybody else,” Wille said of the approximately $9 million in late taxes. “On the other hand, losing your home is very onerous.”

But North Kona Councilwoman Karen Eoff said she saw the two issues as separate.

“There isn’t a mathematical correlation there,” Eoff said. “I don’t think it’s fair to make that claim.”

The administration opposes changing the timetable, Finance Director Nancy Crawford said. The Tax Division generally holds foreclosure auctions twice yearly, with one scheduled for today.

Notices of impending foreclosures stimulate payments, she said.

Crawford said past-due collections should start picking up on their own.

The collections tend to follow economic cycles, she said.

Crawford said the recession, coupled with a staff shortage in the Tax Division, contributed to the delinquencies.

“I think we are in a cycle when you’re going to see improvements in any case,” Crawford said.