Most of an extra tax property owners already pay on their multimillion-dollar residential homes would be earmarked for homeless projects, under a bill advanced Wednesday by the County Council Finance Committee.
The committee voted unanimously to forward the measure to the council with a positive recommendation for two more votes. The bill would tap 75% of the tier 2 tax to use for county-sponsored homeless programs for five years. That’s estimated to raise $7 million for homeless, next year, as property values continue to increase.
Hilo Councilman Aaron Chung, who sponsored the measure, said Bill 111 only sets the revenue source, giving the administration some discretion on how it would be spent. Chung envisions homeless shelters, wrap-around services such as for mental health and law enforcement in areas homeless people camp or linger.
“We’ve got to give them places to live,” Chung said. “That’s the first step.”
Chung emphasized the earmarked funding would last for just five years.
The council, at Chung’s request, heard a full briefing in December on homelessness issues, with agencies affirming they could end homelessness with sufficient resources.
“It’s not my intention nor should it be anyone’s intention to create a funding source for an industry,” Chung said. “We don’t want to finance homelessness; we want to end homelessness.”
But several members made it clear they’d like to see more details about the use of the money, and they indicated there may be amendments or companion measures to the legislation once it gets to the next hearing.
While council members had no problem with the source of the funding, several had strong opinions about the use of the money and they wanted to see a special fund set up to specify how the money would be spent.
“To take earmarked money without knowing ahead of time how it’s going to be used doesn’t make sense to me,” said North Kona Councilman Holeka Inaba.
Several council members wanted money to go for more long-term housing to prevent homelessness, rather than shelters. But Chung pointed out there is already a housing fund in the Office of Housing and Community Development that provides low income housing, moderate income housing and workforce housing programs. Administrator Housing Susan Kunz said the funding gap for housing development is “pretty significant.”
“That kind of dilutes the purpose,” Chung said.
While Hamakua Councilwoman Heather Kimball said she’d prefer seeing all the money go to housing, Puna Councilman Matt Kaneali’i-Kleinfelder wanted a broader approach.
“It’s not just housing,” he said. “There has to be services offered to people who are struggling with whatever they’re struggling with. … Without that, there’s a lot of recidivism.”
The tax, approved in 2020, imposes $13.60 tax per thousand dollars worth of property value over $2 million for property in the residential — or second home — category, compared to $11.10 in tax per thousand for the portion of the property under $2 million. In contrast, the homeowner rate is $6.15 for a primary residence.