North Kona Councilman Holeka Inaba wants the little guy to get more of a break on property taxes than proposed by Mayor Mitch Roth, and he’s brought forward a resolution to get the conversation started.
Resolution 423 is scheduled to be heard at 9 a.m. Thursday during a special budget-setting session of the County Council, when the council is also expected to put the finishing touches on a $779.7 million spending plan for operations, a 27.8% increase over the current year.
“It shifts who gets the breaks. I just adjusted the rates so the benefit really goes to the homeowner class and the affordable rental class,” Inaba said Friday. “The mayor’s proposed budget granted tax reductions to some classes I felt benefited from the return of tourism while we need to protect the people who can barely afford their property tax, their utility bills and their rent and mortgage.”
The council is holding a public hearing at 6 p.m. Tuesday on the tax rates. The public hearing and the meeting Thursday will be held in council chambers in Hilo, with some council members also meeting by videoconference from the West Hawaii Civic Center. The public can testify from those locations, or from the Pahoa and Waimea council offices by videoconference. The public can also testify on Zoom.
The council has until June 20 to set property tax rates. The new budget will go into effect July 1.
Roth’s recommendations would trim 5 cents 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.
Inaba’s plan lowers real property tax rates for homeowners and affordable rentals by 50 cents, agriculture and native forests by 30 cents and commercial, industrial and residential tier 2 by 5 cents. Residential tier 1, apartments and hotel/resort and golf courses would stay at their current rates.
The administration had reduced the tax rate on business categories more to try to balance dramatic increases in values for those categories. While homeowners and affordable rental classes are limited to 3% annual increases until they change hands, some other categories saw their property values jump by double digits.
In addition, said Finance Director Deanna Sako, hotels, resorts and commercial enterprises were hit hard by the mandatory shutdowns i the early stage of the pandemic and needed some relief.
Kohala Councilman Tim Richards agreed.
“There’s a lot of businesses that have taken a lot of expense without a lot of revenue. … We need to be thinking about this,” Richards said at the May 19 council meeting.
He pointed to $30 million in expenses hotels endured in order to keep their employees on heath care programs, even though they weren’t working.
But Inaba said the resorts recovered quickly and now have “outrageous rates and high occupancy levels.”
