HILO — Hawaii Island residents are likely to see their property taxes rise more than 10 percent this year, but only seven came out Tuesday evening to voice their opinion at the only public hearing on the issue. HILO —
HILO — Hawaii Island residents are likely to see their property taxes rise more than 10 percent this year, but only seven came out Tuesday evening to voice their opinion at the only public hearing on the issue.
Mayor Billy Kenoi is proposing the tax hike to help balance a $394.3 million budget, a 7.9 percent increase over the 2012-13 fiscal year. It’s Kenoi’s second tax hike since taking office, but it’s his first budget increase.
All seven testifiers opposed raising property taxes.
Dick Matsumodo, testifying from Waimea, said the property tax increases, coupled with hikes in fees, are too burdensome. The budget also anticipates increases in vehicle registration and weight taxes, bus fares and park fees.
“All these increases you are going to put on us, we can’t afford it,” said Matsumodo. “Everybody’s struggling now, and you’ve just got to make do, because you’re just going to put us in a hole.”
Other testifiers pointed to a recent study that showed the county’s property assessment and tax policies need work. Disparities and inequities abound in the system, they said, and those problems need to be addressed first, which would likely bring in more tax dollars.
“The study is right on. The taxes now are not equitable,” said Marie Correa, testifying from Hilo. “How can your property tax system be in very bad shape and slap 10 percent on top of this on the people of this island?”
Kona real estate agent Gretchen Lambeth said many homeowners pay the minimum $100 annual tax, which doesn’t begin to cover county services.
She recommended raising that to $500 annually as a way to make the system more fair.
Tom Rees, a regular testifier in Hilo, had noted Monday that he thought Kenoi has “taken the easy way out,” rather than addressing the systemic problems.
The County Council will vote on the tax rates on May 30, the same day it plans to amend and finalize the budget. Public testimony will be allowed at that meeting, which begins at 9 a.m. in Hilo.
The increase in tax rates, ranging from 10.2 to 10.8 percent, will add $18.8 million to the budget and bring the total property tax revenue to $217.6 million. That’s $8.3 million less than when Kenoi took office because of lower property values.
The tax bill for property in the homeowner class with a net taxable value of $250,000 will go up $150 a year under the plan. Average annual tax bills for the residential class (second homes and rentals) will increase $314; for the commercial class, $417.48; for the industrial class, $560.88 and for hotels and resorts, $870.48.
Although the tax rate would increase for conservation land, property owners would actually see an average $75.12 annual decrease because property values continued to decrease for that land class last year.
Kenoi, and most council members, are seeking to increase county services after four years of making do with reduced budgets because of the recession.
There are also added costs in the budget because of collective bargaining agreements at the state level.
Ending monthly employee furloughs adds $4.2 million to the budget. Raises for United Public Workers and Hawaii Government Employees Association union members adds another $2.9 million to the budget.
Payments into GASB 45, covering employee retirement benefits, will be increased to $3.1 million, after two years of no new payments going into that account.
The county’s debt service, the annual payment on money it has borrowed, increased $3.9 million to $39.2 million.
Council members didn’t interact with the testifiers at the hearing, but several have said their conversations with constituents has indicated they might be in favor of raising taxes if there is a good reason for it, and if there are specific results.
“A lot of people are more open to paying a little more as long as the services are delivered,” Puna Councilman Zendo Kern said Monday. “I think it’s been shown that we’re getting things done.”
But South Kona/Ka‘u Councilwoman Brenda Ford, who opposes tax hikes, said she’s getting a lot of emails from constituents also in opposition, pointing out the west side of the island was hardest hit by the 2010 tax increases. West Hawaii also has fewer exemptions because homes tend to be newer and residents younger, she said.
Kona Councilman Dru Kanuha said he’ll make up his mind after hearings more from Kenoi and his constituents.
He and North Kona Councilwoman Karen Eoff have scheduled a meeting for 6 p.m. Thursday at the West Hawaii Civic Center to have Kenoi and his Cabinet explain the budget to constituents.
