A measure that would have provided property tax relief for properties not currently under assessment caps was soundly defeated Wednesday by a County Council majority.
Bill 156 would have capped the value of property classified as apartment, hotel and resort, commercial, industrial, agricultural, native forests or conservation at 15% of the previous year’s assessed value for that property. Property values in the homeowner and affordable rental classes are already capped at 3%.
“I know there was some discussion yesterday around a $72 million fund balance,” bill sponsor Hilo Councilwoman Sue Lee Loy said, referring to money left over from last year’s budget. “When this piece of legislation and others were advanced to try to provide relief to our taxpayers … I was not successful. I think we can do better. I think we should let the taxpayers know that the budget we set out with will get accomplished and get things done.”
Opponents included county Finance Department officials, who feared it could hurt the county’s bond rating and thus its borrowing power, thereby raising interest rates on borrowing. Capping assessments is also not seen as a good practice by the International Association of Assessing Officers, who sent a letter at the request of the Finance Department.
Lee Loy, on Wednesday’s fifth hearing of the bill, said she couldn’t give up on it.
“I just want to swing for the fence,” she said. “Maybe we can pick it back up next session.”
With more property than usual changing hands, assessments, which by law are tied to market values, have skyrocketed in some categories.
The total value of net taxable real property in the county was certified this year at $43.8 billion, an increase of $6.8 billion or 18.5% compared to last year. But not every category of real property increased at the same rate. The hotel and resort class got hit the hardest with an average 46.2% increase, industrial with 29.3% and commercial with 28.8%.
The hotel and resort class had such a big increase because the administration, under emergency pandemic proclamations by the governor and mayor, last year reduced assessments by 20% for that category, under the assumption that those businesses had suffered under the mandatory lockdowns and loss of tourism.
Kohala Councilman Tim Richards was the only other yes vote beside Lee Loy.
“I do think we can do better. We’re trying to help out our constituents.,” Richards said. “I will support it although I recognize it as symbolic.”