Council delays decision on tax bills

By Robbie Dingeman
Advertiser City Hall Writer

The City Council's Budget Committee yesterday postponed action on two proposals to give tax breaks for new construction and renovations after a hotel workers union packed the meeting with opponents.

City Council budget chairwoman Ann Kobayashi put off until July 3 any action on the bills to provide real property tax exemptions for certain construction projects.

Daren Miyasato, a Kane'ohe resident who has worked as a banquet porter in Waikiki for seven years, said the tax break bills are poor public policy.

"As residents of Hawai'i, we need to make budget decisions that make sense for everyone in Hawai'i, not just for the corporate elite," Miyasato said.

His union leader Eric Gill, financial secretary-treasurer of Local 5 of the Hotel Employees Union, opposed both the tax-break bills saying that hotels have benefited the most from the existing tax breaks on new construction.

"This year, Honolulu hotels qualified for more than $7.6 million in property tax exemptions," Gill said.

Gill acknowledged that his union in the midst of contract negotiations with hotel owners but said he would have opposed the measures on principle.

"The hotels are singlemindedly seeking to maximize their profits while forgetting those that keep the hotels running and the guests returning," Gill said.

Democratic Party O'ahu County Chairman Jimmy Toyama also opposed the bills. "These two measures really defy common sense."

One of the bills would extend the deadline to complete construction until June 30, 2005, to qualify for an existing property tax exemption on the increase in value from construction on hotel, resort, commercial, industrial, conservation or agricultural lands.

The other bill provides a new seven-year exemption from property taxes on the increased value associated with qualifying construction work of all new construction in all land classifications, including residential.

Murray Towill of the Hawai'i Hotel Association supported the measures as a way to stimulate investment.

City budget officials estimate the measures would likely cost the city about $5 million a year in lost property tax revenues.

Councilman Gary Okino estimated that the compounded effect of both tax breaks eventually could amount to as much as $120 million in lost revenue.

Kobayashi asked city budget officials to study the estimates and return to the committee next month to provide more information before the proposals receive further consideration.