Property tax relief may come this year | The Honolulu Advertiser

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Property tax relief may come this year | The Honolulu Advertiser | Hawaii's Newspaper

Posted on: Thursday, February 23, 2006

Property tax relief may come this year

By Robbie Dingeman
Advertiser Staff Writer

WHAT’S NEXT?

Special meeting: The City Council will hold a special meeting at 11 a.m. today in the Council Chambers, third floor, Honolulu Hale, that will include a final vote on three property tax relief proposals, as well as a move to require the administration to begin curbside recycling next year.

State of the City address: The mayor will deliver his second State of the City address tomorrow, outlining his plan for the coming year. The speech is scheduled for 11 a.m. and will be broadcast live on 'Olelo Channel 54.

The City Council is poised today to pass three bills designed to offer tax relief to property owners reeling from years of double-digit increases in property-tax bills.

The council pushed forward the three proposals from more than a dozen possibilities in response to complaints from hundreds of homeowners about the effect of years of big tax hikes.

Council Budget Chairwoman Ann Kobayashi said the council moved quickly to get the ideas out now — in the week before Mayor Mufi Hannemann sends out his proposed budget so that he could adjust his spending plan to fit with their ideas.

Together, the three measures would get modest relief to property owners this year and next, and offer hope for the future with a change in the method of property assessment for the long term, Kobayashi said.

The bills to be voted on would offer a break this way:

Increase the property tax exemption for owner-occupants beginning by upping the basic $40,000 to $80,000 (Bill 1-2005);

Expand the availability of a property tax credit so homeowners earning up to $50,000 could receive the break in 2006. This rejects an earlier proposal to raise the income limit to $75,000 (Bill 80-2005);

Establish a new way of setting property tax rates so your property tax bill does not increase from year to year except to adjust for increases in the city's fixed costs, such as salaries, debt service and other benefit plans (Bill 12-2006).

Kobayashi has been most optimistic about Bill 12, a move to change the way assessments are calculated, as a longer-term solution. The measure is opposed by the administration.

The push for tax relief comes from Honolulu property owners stung by three years of double-digit increases in their property assessments and skyrocketing tax bills.

City officials calculate that higher assessments mean the city will collect $125 million more in property taxes this fiscal year than last if tax rates remain the same.

Hannemann is proposing a one-time tax credit of about $40 million coupled with a new homeowner's classification to favor residents over people who quickly buy and sell homes.

Hannemann also wants $20 million to go into a rainy-day or reserve fund and the other $65 million to go toward such fixed costs as salaries and debt.

But his measures have been put on hold for now as council members came up with their own proposals and awaited specifics on Hannemann's plans from tomorrow's State of the City address and next week's budget plan.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.

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