The County of Hawaii has a looming emergency on its hands and our elected officials, along with their staff members and hired hands, need to come to understand it quickly or our already challenged working population will be decimated. property tax.
The COVID-19 pandemic caught the world unsuspecting and unprepared. The ensuing confusion is understandable and, through a series of proclamations, the governor and mayor have worked to protect our island society as a whole. In fact, Gov. David Ige’s 5th Emergency Proclamation on April 16 placed a moratorium on evictions and is in line with the same action by the Federal Housing Finance Agency (FHFA). This protects local homeowners and renters from threats of evictions during rent and mortgage collection attempts in the face of a complete tourism industry meltdown, but what about landowners facing blind property tax increases applied by the county property assessors?
Homeowners typically have a long-term investment in property and cover higher costs in the form of mortgage principal and interest, taxes and insurance. Homeowners know the risks when they buy – many understand that it’s a part of life. But when the governor and mayor issue orders resulting in massive layoffs, they need to look all the way through the cause and effect relationship to ensure that they and their employees are not unilaterally and blindly deciding the fate of an entire segment of the population they supposedly serve.
My story: I was laid off in late March, along with most others working in the tour activities business. Schools had already shutdown, county parks were closed and beaches were ruled off-limits, the waste transfer stations were limited and green waste transfer was eliminated. Simply and understandably, the state and county closed for business. And suddenly, I went from working up to 50 hours a week to becoming a stay-at-home kindergarten/first-/fifth-grade reading, math, PE, geography, art teacher and part-time chef – all without a paycheck. My wife and I also had to become our own IT department to get on all the apps and software for online meetings to avoid the spread of COVID-19. It was a trying time, but we are a better family for it.
But as the societal support structure we had invested in since buying our house in 2013 was crumbling away, we received the 2020 Real Property Tax Assessment Notice for Fiscal Year: July 1, 2020 to June 30, 2021. In the small writing it says, “Appeals must be postmarked by April 9, 2020.” For the first time in seven years of continuous unchallenged increases, I appealed. The impact of the collapse of the world we have to know remains entirely unknown and yet, the Department of Finance wants to tax homeowners automatically and blindly.
The governor and mayor issued the order that shut the tourism economy down but they still demand that homeowners foot the property tax bill based on pre-COVID-19 data. They know everyone is impacted, which is why the moratorium on evictions was put in place, but it seems ignorant when homeowners have to pay their “rent” to the county based on arbitrary trends and no longer significant data.
The scarier part of this paradox is when you consider the future. The University of Hawaii is forecasting a loss of 30,000 people in the state – and that is based on a “moderate” model. Other published predictions are showing that about half of Hawaii families could be at or below the poverty line over the coming years. Those people are the working public: payroll taxpayers, consumers of local goods, homebuyers, and various levels of skilled labor. What happens when they go to places with quicker recoveries? Let’s guess: Reduced tax revenue to the county and state, restaurants and shops catering to locals will die on the vine, middle segment property values will sink, and the cost of labor will soar – assuming you can find anyone to do the necessary work.
Lastly, the county is now receiving $80 million dollars in COVID-19 response funds. Is that not enough to offset at least a reduction in property taxes for a few years? I don’t think homeowners expect property taxes to go away entirely but the automatic increases the assessors have implemented unquestioningly over the years need a hard dose of reality in the face of our industry segment’s legislated economic destruction.
Darren Hamilton is a resident of Kailua-Kona.