Posted on: Friday, January 28, 2005

Judge to rule on Kaua'i's property-tax cap

By Jan TenBruggencate
Advertiser Kaua'i Bureau

LIHU'E, Kaua'i — Fifth Circuit Court Judge George Masuoka said yesterday that he will rule within three weeks on whether the county must enforce a charter amendment approved by voters in November to cap property tax bills for homeowners.

The announcement came during a hearing in which Masuoka refused to dismiss a county lawsuit challenging the legality of the charter amendment.

The amendment, spearheaded by a group called 'Ohana Kaua'i, caps the property tax bill for owner-occupants to protect them from increases in the real estate market.

County officials say it's illegal, as well as unmanageable, to handle tax policy through the ballot box. They say county and state law make the County Council the sole agency able to make decisions about real property taxation.

But 'Ohana Kaua'i attorney Harold Bronstein said that charter amendments are clearly within the authority of the public, and that nothing in state and county law prohibits such amendments from dealing with tax issues.

Ultimately, Bronstein said, the tax cap is a fairly minor amendment to county taxation law.

'Ohana member Monroe Richman said earlier that it applies to only about 11 percent of properties on the island.

The amendment freezes real property tax bills at 1998-99 levels for owner-occupants. Thereafter, as long as the owner lives in the home, the tax bill can't go up more than 2 percent per year, or by the amount of the inflation index set by the Social Security Administration. If the property is sold, the tax is adjusted based on the new fair-market value, and then can't increase by more than the proposed adjustment mechanism each year.

Reach Jan TenBruggencate at jant@honoluluadvertiser.com or (808) 245-3074.