ISLAND VOICES
Another shell game on taxes

Lowell L. Kalapa is president of the Tax Foundation of Hawaii.

Let's talk about the other myth surrounding the real property tax debate highlighted by Jerry Burris' comments in his Feb. 22 column. Not only is it the shell game of tax rates versus tax bill, but it is the shell game of residential and nonresidential property. Note well what our county leaders tell us: "There won't be any tax rate increase on residential property."

And what about nonresidential property? Well, the mayor tells us they haven't been paying their fair share. Council members denounce any tax rate increase on residential property, but why not raise it on businesses — "because they can pass the cost of the increase on"? And to whom do our council members think those businesses pass on that increased cost?

Ever wonder why the cost of the bag of rice is higher this year than last or the aloha shirt costs $2 more than it did last season? Elected officials love this shell game because they can raise tax rates and therefore tax bills on businesses and not take the heat for it. Rather, it is those businesses you and I patronize that get the blame.

Let's set the record straight. The residential rate for other than apartments went up 10 cents, or 2.7 percent. The rate for commercial properties like the retail stores where we shop saw their rate go up by $1.39 per thousand dollars of value, or a 15 percent increase in the rate over the previous year. Agricultural property tax rates (these people grow what we eat) went up 74 cents per thousand, or a 7.4 percent increase in the rate. Industrial property (this is where they warehouse my cereal before delivering it to my neighborhood grocery store) tax rates went up by $1.34, or a 14 percent increase. Even hotels, which have historically paid the highest tax rates, saw a 67-cent increase in their rate, or a nearly 7 percent increase.

Residential property accounts for 76 percent of the valuations in the City & County of Honolulu, yet produces only 53 percent of the real property taxes collected. On the other hand, nonresidential property accounts for only 24 percent of the real property value but is asked to come up with 47 percent of the real property taxes collected in the City & County.

It is about time county officials were up-front with residential taxpayers.