COM 0717.000 2004-2006 - Laserfiche WebLink

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The Honorable Chairman Stacy Higa and Members of the County Council Page 2 March I. 2006 The budget presented today reflects some of the lessons learned in both hardship and prosperity: • As we strive to "catch up and keep up" with maintenance, repairs, and services throughout the island, we must also set funds aside for future needs and prepare for economic uncertainties. • We must constantly seek ways to preserve the quality of life of our residents through affordable and accessible housing, transportation, recreation, public safety, and other County services. • We must balance our desire to fully meet the service expectations of our residents, with the need to keep the growth of government and property taxation within reasonable limits. REAL PROPERTY TAX The real property assessed valuations used in these revenue projections are preliminary figures and the values certified in April may vary from those assumed here. The final budget that is presented in May will be based on the final numbers. Assessed Values. In spite of the 3% growth limit in the Homeowners class, real property tax assessments for FY 2006-07 are expected to increase by 35.4%. The classes of properties with the highest increases are Agriculture (70.4%), Improved Residential (35.6%), and Apartment (35.2%). The districts with the highest increases are Puna (96.4%), Kau (73.5%), and North Hilo (38.5%). The large increases are due to significant increases in the values of land (44.1%), as opposed to buildings (24.7%). New construction accounts for 2.9% of the overall increase in assessments. Proposed Rate Reductions. Although the estimated net taxable real property grew by 35.4%, this budget reflects a 19.5% increase in estimated current real property revenues, and an 18.8% overall increase in property tax revenues (includes penalties and interest). Specific property tax rate reductions will be proposed when the amended budget is submitted in May. These reductions will provide needed relief for classes and types of properties that experienced the largest increases in valuations. To illustrate the extent of possible reductions, if tax rates for each of the 8 classes of properties, not including the Homeowners class, were reduced by as much as 13%, revenue projections would be met. Future Plans. For the following year, the possibility of placing growth limits on other classes of property, similar to what was recently done for the Homeowners class, will be explored. Any suggestions the County Council may have in addressing the need for property tax relief, particularly for properties obtained for non -speculative purposes is welcomed.