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The Honolulu Advertiser
Posted on: Thursday, June 1, 2006

Property tax relief decision nears

By Robbie Dingeman
Advertiser Staff Writer

WEDNESDAY VOTE

The City Council is scheduled to take a final vote at a meeting that begins at 10 a.m. Wednesday in Honolulu Hale. Voting will be on property tax rates as well as on the city's record $1.4 billion operating budget and a construction budget that will top $631 million.

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Honolulu resident William Amona likes the City Council's proposal to give a one-time "discount" of $200 off the property tax bill of homeowners who have filed as owner-occupants but was hoping for more of a tax break.

"That $200 is not really exciting for us," Amona said when he testified yesterday before the council's Budget Committee at Honolulu Hale. "I'm here because we want our money to go a little further."

Even though the proposed tax changes will reduce his taxes some, "we still owe the county $4,688," he said referring to his property tax bill for the current year.

Council Budget Committee Chairwoman Ann Kobayashi heard from hundreds of people this year who complained about the effect of three years of big increases in their property tax bills.

Yesterday, she presided over the last committee meeting before the council takes a final vote on the budget and tax rate proposals.

She knows that some people won't be satisfied with the discount and a proposal to drop the property tax rate by 16 cents per $1,000 for homeowner/occupants.

"Some people might think it's not enough," she said. "We wish we could have done more."

But Kobayashi said the council is faced with paying for core city services, including sewers, public safety and roads each year. Officials must add unexpected costs such as millions of dollars in expenses related to the winter storm that brought 43 days of rain and damage to Honolulu.

The council heard from about a half-dozen residents yesterday.

Tax Foundation of Hawai'i President Lowell Kalapa opposed the council's plan to lower the property tax rates for residential property owners both for single-family homes and apartments and to raise the rates for non-residential property classes.

Kalapa said the council is choosing a politically popular strategy by easing the burden on homeowners while increasing the rates for business, commercial and hotel/resort property owners.

"While homeowners may breathe a sigh of relief, they will be hit in the pocketbook every time they shop at the local grocery store for food or at the department store for a new dress," Kalapa said.

He said the council should make sure taxpayers understand that they could pay less if the city trimmed services.

"You're fooling people into thinking they can have many more city services," Kalapa said. "If you want hula girls and torchlighting in Waikiki, it comes with a higher tax burden."

Murray Towill, president of the Hawai'i Hotel & Lodging Association, said commercial properties make up 15 percent of the assessed value of Honolulu property but contribute 35 percent of property taxes.

"As the tax burden is shifted to the nonresidential categories, the public loses its appreciation of the real cost of government and what level of services it is willing to fund," Towill said.

Councilman Rod Tam said he thinks some of the council's proposals will help to ease the outcry of angry property taxpayers.

But Tam said much of the blame for the increased taxes should fall on speculators who bought and sold and pushed up the prices and valuations for homes.

"You had carpetbaggers coming here from all over the world," he said.

Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com.