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The Honolulu Advertiser
Posted on: Monday, February 27, 2006

City must rethink tax, spending plan

Had this been the Christmas season, the tax-relief package offered by the City Council would bear a resemblance to a stocking filled with lumps of coal.

Just like kids on Christmas Day, taxpayers anticipated something good and got a dose of disappointment instead.

Reality check: It's almost March, not Dec. 25, and property tax bills will start coming due in August. And now there's little hope that taxpayers will get anything more than a pallid, if well-intentioned, discount on their bill.

In case anyone at Honolulu Hale needs a reminder: Sewer fees are up. Vehicle weight taxes are up. There's an excise tax hike in our future and oh, yes! our property assessments are off the charts.

There are the token gestures, of course. And to the extent that they've been offered to more outstretched palms than in the original proposals, the sentiment at least can be appreciated: More homeowners would get a fatter exemption; and seniors, because of their fixed income, would get another boost.

There's a valiant effort to neutralize the impact of property values in Bill 12, which bases tax calculations on whatever is needed to cover basic services. While it's encouraging to see this philosophy codified, that is in fact the way the budget juggling act is supposed to work now.

And Bill 80, the only one in the package roundly saluted by all council members at least gives a tax cap to the lowest-income homeowners sooner than initially proposed.

But here's the problem: When we're dealing with property values that have soared as high as they have on O'ahu, these fixes just don't help enough.

Mayor Mufi Hannemann sounded a dismal note in his State of the City address on Friday, showing little enthusiasm for a sizable giveback in taxes, citing the city's mounting bills.

The only way tax "relief" will really relieve anyone this year is if there's a cut in the rate that's applied to the property assessment. That's looking less likely every day.

Maybe it's time to decide which city services could be cut or underwritten through private partnerships. Council members, consulting with taxpayers, should come up with ideas for how the job list could be winnowed.

Property values are starting to soften, but they won't come down very much very soon. Honolulu needs to tighten that belt or feel the pinch.