Posted on: Friday, July 30, 2004

Council sets vote on farmland veto

By Johnny Brannon
Advertiser Staff Writer

City Council leaders hope to overturn Mayor Jeremy Harris' veto of a controversial tax break for agricultural property, but it remains unclear whether that would have any impact on tax bills this year.

Harris had warned for weeks that he would reject Bill 35 because it would illegally unbalance the city's budget by grant-ing tax breaks totaling up to $9.6 million. His administration filed formal notice of the veto yesterday.

Council chairman Donovan Dela Cruz immediately scheduled a special meeting for Wednesday to override the veto, but the administration says that's a useless gesture.

The bill requires that applications for tax relief be filed by Monday — two days before the council could override Harris' veto.

But Dela Cruz said the bill can be enforced because it gives the administration until the following week to forward the requests to the council. The city is obligated to accept applications for tax breaks in the meantime, he said.

It takes six of the council's nine votes to overturn a veto.

The dispute stems from rising property taxes on farmland triggered by two things: the increased value of most land in all categories on O'ahu, and a new system that bases agricultural taxes on property values rather than crop yield.

The new system is meant to encourage farming by allowing land to be assessed at 1 percent of its fair market value if the owner "dedicates," or restricts it, to agriculture uses for 10 years. But some land owners have declined to dedicate their property, including some who hope to develop it soon. And some farmers have not been able to dedicate the land they till because they lease it from owners who won't agree.

The administration is considering tax discounts on a case-by-case basis for those who can show they are growing a crop and can legally sell it. Bill 35 would allow tax breaks on all land zoned for agriculture, even if it's not used for farming.

Councilman Gary Okino introduced a bill yesterday that would allow farmers who lease land to dedicate it themselves in the future, and would provide incentives to landowners to grant long-term leases.

Dela Cruz introduced a competing measure earlier this week that also allows lessees to dedicate land. He also has called for the creation of a task force to study such proposals and make recommendations to the council within 10 weeks.

Reach Johnny Brannon at 525-8070 or jbrannon@honoluluadvertiser.com.