Neighbor island mayors seek property tax hikes to prevent layoffs, program cuts

Published: May. 9, 2017 at 10:38 PM HST|Updated: May. 10, 2017 at 10:46 AM HST
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HONOLULU (HawaiiNewsNow) - The mayors of Kauai, Maui, and Hawaii counties are proposing property tax increases to cover rising costs and state cuts.

The only exception is Honolulu, where Mayor Kirk Caldwell and the City Council are resisting pressure to tax homeowners more.

"It's a very difficult thing to do in decision making and I guarantee you nobody is happy about it," said Hawaii County Mayor Harry Kim.

Property taxes are a major source of revenue for the counties. They make up a staggering 80 percent of Kauai County's funding.

Kim says increasing property taxes will help raise the $21.5 million needed to balance his budget. He says he feels terrible about his decision, but says it's much better than the alternative.

"You would have to layoff employees and the biggest numbers of employees obviously is police and fire. I will not, at this time, consider laying off people. Our services are behind enough as it is," Kim said.

Kim is proposing a 6.5 percent property tax increase with exemptions for senior homeowners on fixed incomes.

On Maui, the mayor says a 7.5 percent across the board hike is needed to help pay for higher operating costs, like replacing old county vehicles.

And on Kauai, the increase would be around 3 percent for all property classes. That means residential property owners would pay 19 cents more per $1,000 of home value.

"We made a commitment to the community to return all that to help repair our roads and our bridges," said Kauai Mayor Bernard Carvalho.

The mayors say these hikes are a result of state lawmakers reducing their share of the tourism tax by $10 million this session.

"If the fair share was given, I guarantee you none of the counties would have to raise their property tax," Kim said.

Lawmakers have pointed out Hawaii has the lowest property tax rates in the nation, because unlike other states, the counties here are not paying for schools.

Honolulu Mayor Kirk Caldwell is proposing tax hikes for hotels and luxury rentals, but not regular homes. He's been under pressure to raise property taxes as the state legislature debates how to cover the rail shortfall.

All of the proposed tax hikes will have to be approved by the city and county councils.

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