Mayor Mitch Roth’s administration is recommending a rollback in property tax rates for almost all property classes, following updated assessments showing an additional $23 million on top of the $45.4 million increase estimated in March.
Even with the rate rollback, the proposed $779.7 million budget is a 27.8% increase over the current year. Of the increase, $42.6 million is due to additional grant revenue and does not affect taxes, the mayor said Thursday in his budget message.
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.
Finance Director Deanna Sako said the county wanted to cut some taxes, especially in light of the economic hardships hotels and commercial establishments endured during the early days of the pandemic.
“A lot of them are small businesses that helped us during the pandemic so we wanted to give some kind of relief,” Sako said.
In addition, she said, the recent supply chain and sporadic food shortage issues emphasize the importance of a self-sufficient agricultural industry.
“We do want to encourage agriculture on our island,” she said.
The new budget adds 49 more positions on top of the 39 new positions recommended in the March 1 preliminary budget. Most of them are clustered in the Fire Department, Mass Transit, Public Works, Parks and Recreation and Environmental Management.
The administration is also recommending another $9 million be added from the general fund for a housing production program to address affordable housing issues on the island. That’s in addition to the $9.5 million garnered from the new tier 2 tax on luxury homes.
The County Council will next take up the budget and set the property tax rates over the next two months. The new budget would go into effect July 1.
Roth said the budget represents a three-pronged approach: provide support for those most in need, provide resources for the workforce to better serve the county and invest in sustainability efforts and innovative solutions for long-term success.
“This proposed budget represents our departments’ best efforts to meet our residents’ needs quickly and responsibly while striving to maintain the level of services our residents deserve,” Roth said in his budget message. “These investments are critical to the future of the County of Hawaii.”