Posted on: Wednesday, November 21, 2001
Hawai'i County nears deal on homestead taxes
By Hugh Clark
Advertiser Big Island Bureau
HILO, Hawai'i — A seven-year stalemate over delinquent property taxes on Hawaiian homestead land on the Big Island appears headed for a settlement.
The Hawai'i County Council Finance Committee yesterday voted 6-3 to recommend approval of a compromise reached between Mayor Harry Kim and the Department of Hawaiian Home Lands that would result in the payment of $611,654 in delinquent property taxes owed by 317 homestead lessees.
The proposal would see the DHHL — not the individual lessees — pay the back taxes, which in some cases has been accumulating since 1974. On average, the agreement would provide $1,930 relief per taxpayer.
Still unresolved is the question of whether homesteaders will be expected to pay future property tax bills.
Voting to recommend approval of the agreement were Bobbie Jean Leithead-Todd, James Arakaki, Leningrad Elarionoff, Nancy Pisicchio, Gary Safarik and Dominic Yagong. Opposing it were Curtis Tyler III, Julie Jacobson and committee Chairman Aaron Chung, who expressed concern over the legal and constitutional issues raised by giving preferential tax treatment to Native Hawaiians.
Chung, an attorney, said he believes an act of Congress may be needed to resolve the county's taxing authority on homestead land.
Kim told council members the compromise is part of an overall strategy to clear the county's books of tax delinquencies. In reply to questions about fairness, the mayor said: "I am very comfortable that the DHHL is being treated differently."
Kim described homesteaders as a special case. He pointed out that homesteaders, who lease property from the DHHL for a nominal fee of $1 a year, never own their land under terms of the 1920 congressional act that established the homestead system in Hawai'i.
The county does not levy property taxes for the first seven years after a leasehold is awarded. After that, a minimum tax of $25 per lot is charged, and improvements on the land are taxed at the same rate charged nonhomestead properties.
Ben Henderson of the Hawaiian Homelands Commission defended the proposed agreement, which has yet to be approved by the commission.
He said it is "a one-time offer" that probably would not be renewed if the council turns down Kim's request.
