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<br /> The Honorable James Y. Arakaki <br /> and Members of the County Council <br /> Page 2 <br /> October 8, 2001 <br /> • Real property tax reports; <br /> • Testimony presented at Council meetings in Kona and Hilo; and <br /> • fetters written to the Council, Mayor, and media on the subject. <br /> IUleetings Meld. Additionally, numerous meetings were held with staff of the real <br /> property tax division, the Director of the Hawaii Tax Foundation, and individual <br /> members of the Council to discuss the subject. <br /> Guiding Principles. Based on what was found, it was determined that the <br /> minimum tax proposal must: <br /> • Be fair to all taxpayers; <br /> • Consider the resources of individuals affected; <br /> • Be simple to understand and easy to administer; <br /> • Consider the value of lava or unusable land; and <br /> • Enable taxpayers to share in the cost of government operations and services. <br /> IVlodels Considered. Five proposal models were then considered: <br /> 1. Assigning a fixed amount as the minimum tax <br /> Major advantages: easy to understand, easy to administer, minimal <br /> operational change. <br /> Major disadvantage: Does not consider the income or resources of the <br /> individual. <br /> 2. Assigning a fixed amount, with a lower minimum tax given to <br /> homeowners <br /> Major advantages: easy to understand, easy to administer, minor operational <br /> change, adds another benefit to the homeowner. <br /> Major disadvantage: Does not consider the income or resources of the <br /> individual. <br /> 3. Assigning a fixed amount, with exceptions based on the homeowner's <br /> adjusted prose income <br /> Major advantage: Considers the income of the individual. <br /> Major disadvantages: Difficult to administer, process is cumbersome, may <br /> lead to abuse, need more staff to carry out. <br /> 4. Assigning a fixed amount, with exceptions based on the value on the <br /> homeowner's improvements <br /> Major advantage: Considers the resources of the individual. <br /> <br />