Property values are up dramatically, there’s a record high $779.7 million budget in the works and the County Council, for the first time in decades, is considering lowering the tax rates.
Mayor Mitch Roth’s budget proposal to the council includes 88 new positions and is a 27.8% increase over the current year. Once considered and possibly modified by the council, it would go into effect July 1.
Roth said the budget represents a three-pronged approach: provide support for those most in need, provide resources for the workforce to better serve the county and invest in sustainability efforts and innovative solutions for long-term success.
Roth’s recommendations would trim 5 cents in tax per thousand dollars of property value off the homeowners and affordable rental classes, the categories that already pay the least tax. It would reduce the residential tier two tax on luxury second homes by 10 cents while leaving the basic residential rate the same.
Apartments, which currently have the highest rate, would be reduced 60 cents to match that of other residential property. Commercial and industrial would be cut by 20 cents, agriculture by 25 cents and hotel/resorts and golf courses by 45 cents.
The total value of net taxable real property in the county was certified this year at $43.8 billion, an increase of $6.8 billion or 18.5% compared to last year. But not every category of real property increased at the same rate.
The hotel and resort class got hit the hardest with an average 46.2% increase, industrial with 29.3% and commercial with 28.8%.
“When the assessments came out with our property values, it was something that caught everybody’s attention on the coast,” said Stephanie Donoho, of the Kohala Coast Resort Association. “We went to the Finance Department first and said,’Help us understand this.’”
Donoho said some properties went up much higher than the average, even doubling in value. She said county officials explained how even a few properties changing hands in limited category such as theirs could dramatically change valuations of similar properties.
Still, Donoho said, hotel and resort owners are supportive of the 45-cent tax reduction per thousand dollars in property value. They’re also supporting, she said, Bill 156 to be considered again Tuesday that would limit future valuation to 15% annually, similar to the 3% cap currently on properties in the homeowners category.
“How do we help business planning and forecasting by putting in some floor and ceilings,” she asked.
Another concern for some is the process of appealing a tax assessment.
A total of 797 appeals were filed this year, compared to 250 appeals in the previous year. The amount in dispute is $718.5 million, compared to $128.7 million the previous year.
“Due to my experience in real estate, appraisals and property management I’m often asked by people to look at their property assessments,” said Garth Yamanaka at an April 19 committee meeting. “Simply stated, the whole process from filing an appeal to the tax appeal board hearing is not fair and equitable to the community.”
The public will have the chance to weigh in on these issues Tuesday, during a 9 a.m. Finance Committee meeting followed by public hearings at 5 p.m. and 5:30 p.m. There will be another opportunity Thursday, when the council begins a special meeting on the budget at 9 a.m.
The meetings will be held in Hilo council chambers, with videoconferencing from the West Hawaii Civic Center and Pahoa and Waimea council offices. The public can also testify via Zoom by registering by email at councilremotetestimony@hawaiicounty.gov or calling (808) 961-8255 by noon the day before the meeting. Written testimony can be sent to counciltestimony@hawaiicounty.gov .
(This article has been corrected to indicate Bill 156 would limit future valuations of certain categories of property to 15%.)