This undoubtedly is the least favorite job for city government: deciding how to hand the bill for services to the taxpayers that elected them.

However, the property tax rate is the basis of financing city operations and the essential first step in passing a balanced budget. The Honolulu City Council is considering various approaches, including a proposal favored by the administration and others, to create a separate, lower tax rate for residential owner-occupants. An alternative idea before the council is to increase the property tax exemption for the same class of property owner.

But this is not an ideal way to ease the tax burden.

It's reasonable to propose tax relief, especially during a recession and job losses that have caused foreclosures to spike and have pushed more O'ahu homeowners toward the brink.

But there's already a mechanism in place to assist taxpayers facing difficulty paying the tax bill — one that could help during tough economic times, and benefiting those who need the most help.

The "circuit-breaker" limit on taxing lower-income homeowners works for incomes under $50,000 and caps the tax liability at 5 percent of income. Officials should consider raising the qualifying income or adjusting tax limit. Offering relief through expanding the circuit-breaker allows for more targeted relief for a greater share of homeowners.

Advocates of a separate tax rate say investors have driven up property values that owner-occupants are forced to pay.

But the unintended consequences of the separate rate is to deliver another blow to commercial property owners, who already bear a disproportionate share of the tax burden. Nonresidential property represents only 20 percent of the valuation on O'ahu but the taxes paid on it account for nearly half of the total, according to the Tax Foundation of Hawai'i.

It's also a disincentive for investment in rental properties. Although the market has softened during the downturn, inventories at the lower end of the rental scale need to be encouraged for the long term.

With the economic recovery expected to take time, it would be counterproductive to hinder O'ahu businesses further. It's not necessary to hurt business while lending owner-occupant some needed tax relief.