Posted on: Friday, October 19, 2001

The September 11th attack
Council scrutinizes Harris tax-relief idea

By Robbie Dingeman
Advertiser City Hall Writer

Honolulu City Council members are raising questions and concerns about a proposal by Mayor Jeremy Harris to extend and expand a real property tax holiday for new construction.

City Council Budget Chairman Steve Holmes said he and his colleagues who plan to run for re-election are cautious about any idea that will cost the city revenue without an accurate prediction of what kind of economic boost it might create.

"I'm going to take a real hard look," Holmes said. "I want to be responsible."

Harris floated the idea within days of the Sept. 11 East Coast terror attacks. Yesterday, he described it as part of a continuing economic revitalization effort. "If we can pump money through our economy by assisting the construction industry, it will help all of us."

Harris said the city is working to fast-track about $204 million worth of city public improvement construction, such as sewer work to put some money into the economy in the coming months.

Holmes said the decline in revenue combined with increased costs for security, for rubbish pick-up associated with dengue fever and other new priorities make it especially important to review any money measures.

"We also have a lot of overtime for dealing with the national crisis," Holmes said.

Harris said the tax break for business and resort construction is costing the city $2.5 million this year but he argues that it pays off by encouraging such projects as the Hilton Hawaiian Village Hotel's Kalia Tower, worth more than $65 million.

City Councilman Gary Okino said he questioned the effectiveness of offering a tax break to businesses and residents for new construction as an incentive.

Okino said it's hard to gauge how effective the current tax holiday has been. "We're going to have more negatives to pay for in the future."