COM 0118.020 2002-2004 - Laserfiche WebLink

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8-23-04; ~:4"IAM; ~BOB5283463 tBOB5283463 +t 3/ 4 I Honorable Aaron S.Y. Chung, Chan, and Members i Finance Committee August 24, 2004 Page 3 j While the remedy for this inequitable tax increase of approximately 250 percent has been characterized by some as a "windfall" to landowners, it is the City and County which in fact ~ stands td reap the benefit from the "windfall" created by Ordinance 02-39 on lands which receive ~ ~ few if auy municipal services. Meanwhile, farmers who cannot afford the increased taxes will probabllj abandon their agricultural operations, to the great detriment of the economy and envirorir~rent of the people of Oahu. Further, these flawed assessed valuations may not be sustain on appgal (and most have been appealed). Unfortunately, many farmers cannot wait for the p tcome of the protracted appeals process. We may be on track for a major "lose-lose" I situati on Oahu, in which the City and County will put many farmers out of business and ultimat y have to refund much of the taxes wllected on overstated values. It is tm rtant, in considering an appropriate tax structure for agricultural lands, to understand that rea~ roperty taxes are intended to pay for municipal services. These services include police, fire, se~v ,water, etc., that are provided by the County. There needs to be a nexus between the taxes g paid and the services being received for the property being taxed. For example, residential properties should be taxed at a level proportionate to the demands they place on the municip~ services. In the case of agricultural lands, it is difficult to find that rational nexus to justify a arge tax base, as agricultural users usually have little or no impact on municipal services. Also, th tax system should not be used as an enforcement tool for land use. If the land is zoned for agric tore but is not being used for agriculture, then the remedy is to pursue the matter as a zoning, 'olation, not through some type of punitive taxation policy. Allowing agricultural land 'i , to lie fal ow, particularly after scores of yeazs of intensive plantation cultivation, is not I ! necess ly a bad thing. The federal government pays farmers across the Midwest and elsewhere i + undz;r m ti-year contracts not to grow crops. ~ We bel} ve that the County of Hawaii should consider the following: 1. I axes on all agricultural lands, both dedicated and non-dedicated, should be based on 'cultur'al activity, not on "market value" determined from sales transactions of lands hich maY not have been in agricultural use. There should be a fixed assessed valuation i f land based on its agricultural crop type or use. In this regazd, the County's oductivity assessment system is exemplary and should be retained for all agricultural '1 ds. I 2. 't'he tax assessment system needs to allow for multiple uses on a single parcel. The taxes ould reflect the actual use of lands on the parcel, not generalize or blend the sessment. In particular, waste or unusable lands should not be taxed as if they are sable. i i II