A bigger break in taxes for homeowners and kupuna is all but assured next year, following a unanimous committee vote Tuesday on a bill and assurances from the administration that it supports the measure.
Bill 182 doesn’t change tax rates but would increase the value of property that would be taxed. The bill also adds two new categories for kupuna exemptions — 65 years and 75 years — while increasing the amounts exempted. The exemptions would be applied beginning July 1, 2023.
“It’s another way to provide relief to our residents through a different mechanism that I think is more targeted,” said Hamakua Councilwoman Heather Kimball, the bill’s sponsor.
The bill totally exempts property under $50,000 in value from property taxes, instead of the current $40,000. That means the property owner would pay only the $200 minimum annual tax. For property over $50,000 in value, the homeowner exemption would be $50,000 rather than the current $40,000.
With the median home value at $517,000 approximately half the homeowners would get a 20% reduction in their taxable value, Kimball said.
Homeowners between 60 and 65 years old would get $85,000 of their property value exempted from property tax instead of $80,000. Those between 65 years old and 70 years old would get a $90,000 exemption, a new category. Those 70 years old to 75 years old would get a $105,000 exemption, compared to the current $100,000. And those 75 years and older would get $110,000 of their property value exempted.
“I do like it because its broad reaching but it’s also mindful of trying to strike that balance in there,” said Kohala Councilman Tim Richards. “We do need to give some reprieve.”
The bill would cost just $1.2 million annually in a budget that’s now set at $785.9 million, which is $175.8 million, or 28.8%, higher than the current year.
Steve Hunt, former deputy director of the Finance Department who’s now the internal control manager, said increasing exemptions for lower-value property is a less regressive way to provide tax relief to those who most need it.
“Rate relief is regressive,” Hunt said. “Increased exemptions for those that are on the lower spectrum will give the greater benefit.”
Hilo Councilwoman Sue Lee Loy and Hilo Councilman Aaron Chung both supported the measure, but both questioned whether there was a way to provide kupuna discounts based on something other than strictly age.
Chung said the county should really consider who “we’re trying to help.” He said some way of tying relief into the number of years a resident had their homeowner exemptions could make more sense.
“Coming here buying a new home and then immediately getting a homeowner exemption only because they’re a senior citizen, I don’t get it,” Chung said.
