Ag tax plan postponed

A $28 million program aimed at benefiting farmers will continue in its current state a little longer, despite fears some landowners are abusing the program at the expense of other taxpayers.

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A $28 million program aimed at benefiting farmers will continue in its current state a little longer, despite fears some landowners are abusing the program at the expense of other taxpayers.

The County Council Finance Committee postponed the measure, Bill 317, to an undetermined date so the newly elected council can take a fresh start on it next year. Kohala Councilwoman Margaret Wille, chairwoman of a task force that created the measure, said in the meantime she’ll meet with more farmers to get more input.

Wille said she’d taken the bill to the county Agriculture Advisory Commission, but several other council members believed farmers were still surprised about the bill. The measure received very little interest or testimony at several advertised meetings of the Real Property Task Force.

Three new council members will take their seats Dec. 1. Wille and the other five incumbents were re-elected.

“This bill addresses an ag loophole and major concern that has been going on for 40 years and in my view … there was no political spine or will to take care of it,” Wille said. “You get in the program, you can sit there forever … we’re basically losing $28 million … everybody else’s taxes go up for that.”

Bill 317 would do away with the so-called “nondedicated” agricultural exemption, and require commitment to a three-year period to qualify for the reduced property values. The current 10-year dedication program, which has more generous tax breaks, would continue as before.

Property owners who commit to keeping the land in agriculture at least 10 years — the so-called “dedicated exemption ” — pay taxes based on half those values. There are an estimated 10,000 farmers in the nondedicated part of the program, compared to only 500 in the dedicated.

The acreage requirements could knock out 400 to 500 parcels, said task force member Bob Price. The dedicated program requires pastureland to be a minimum 10 acres, feed crops 5 acres, orchards 1 acre and intensive agriculture 0.25 acre.

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Land planner Jeff Melrose, who helped create an agricultural baseline report for the county, and 39-year county Real Property Tax Division employee Wesley Takai, now retired, gave the only testimony on the bill. Both said the bill needs more work.

“If there are loopholes and abuses in the present program, the solution is tightening of office and enforcing procedures, not making ordinance changes,” Takai said. “It’s like having a good, reliable car that gets a flat tire; fix that flat or change the tire, not buy a new car that may turn out to be a lemon.”

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