Non-profits concerned about proposed property tax reforms

American Cancer Society property
American Cancer Society property
Jackie Young
Jackie Young
Lowell Kalapa
Lowell Kalapa

By Jim Mendoza - bio | email

HONOLULU (HawaiiNewsNow) - The American Cancer Society owns the Nuuanu land its offices sit on.

"What we provide here at this house is wigs and transportation and patient information and services without charge," chief staff officer Jackie Young said.

The non-profit's property tax bill is $600 a year, thanks to an exemption. But that could change. A special commission now recommends basing real property taxes for many non-profits on a percentage of a property's assessed value.

"Those organizations that have a lot of land that they use for their exempt activities are therefore going to have more value. Then we take a percentage of that value and apply the applicable rate," said Lowell Kalapa, who serves on the Real Property Tax Commission.

The American Cancer Society's property is assessed at about $2 million. It wants to lease another property to expand operations.

The city would have to come up with a formula, but the Cancer Society anticipates its property tax bill would be much higher than $600.

"It will adversely impact our operating expenses," Young said.

The commission made recommendations to the City Council to capture some of the $100 million a year the city gives away in tax breaks. That money could pay for city services.

The reforms would affect thousands of homeowners and hundreds of non-profits that include churches, credit unions and private schools.

"With the blanket exemptions that many of these categories have, one can assume that they don't know what it costs to provide that service. Therefore the accountability relationship between those who pay for the services and those who benefit is lost," Kalapa said.

But Young said the free services her organization provides for cancer patients could be cut back if other costs increase.

"For sure we're going to say that there's an increasing need, and that we need to keep our operating expenses down, and that we provide free services to the people of Honolulu. That needs to be taken into account," she said.

Young and other heads of non-profits will get their chance to comment when the City Council begins public hearings on the commission's recommendations.

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