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<br /> Harry Kim ~y:' ~ Dixie Kae[su <br /> Mayor Managing Director <br /> • Barbara Kossow <br /> Deputy Managing Director <br /> County of Hawaii <br /> 25 Aupuni S[ree[, Room 215 • Hilo, Hawaii 96720 <br /> (808)961-8211 • Pax (808)961-6553 <br /> c-: <br /> 'Vi <br /> Q T <br /> February 20, 2007 = ' c <br /> N <br /> Pete Hoffmann, Chairman and <br /> Members of the Hawaii County Council ~ <br /> Hawaii County Council <br /> 25 Aupuni Street _ x <br /> Hilo, HI 96720 <br /> Re: Resolution to Reduce the Homeowner Real Property Tax Rate <br /> I have reviewed Resolution No. 64 07 requesting the Mayor to consider reducing the Fiscal Year <br /> 2008 homeowner real property tax rate, and would like to take this opportunity to comment. <br /> BACKGROUND <br /> Tax increases, FY 2002-03. The downturn of the economy subsequent to the events of 9-11 <br /> required this administration to make a very difficult decision as we prepared our budget for <br /> Fiscal Year (FY) 2002-03. With an anticipated shortfall of $8.1 million, the County needed to <br /> reduce services and/or increase property taxes in order to submit a balanced budget to the <br /> Council in March 2002. Our amended budget in May proposed a property tax increase of $7.6 <br /> million. <br /> Although every class of property was affected by this increase, the tax rate for the homeowners <br /> class grew most. Prior to the change, the tax rate for homeowners, the largest users of County <br /> services, was about half of what properties in other classes were taxed. The homeowners tax rate <br /> was $4.45/$1,000 of valuation, while the rates for properties in other classes were between $8.50 <br /> and $10.00/$1,000 of valuation. We believe the new tax rate for homeowners ($5.55/$1,000) <br /> was fair and still maintained a significant benefit. <br /> Homeowners benefits, FY 2005-06. As the economy improved, assessed values grew and the <br /> County was able to gradually resume its maintenance and repair responsibilities, expand <br /> services, and provide property tax relief for homeowners. In November 2004, three ordinances <br /> were adopted by the Council to protect homeowners and farmers from the tax effects of <br /> skyrocketing property values: <br /> • Ordinance 04 123 created an additional exemption of 20%, up to $80,000, for <br /> qualifying homeowners. Sent to Council 10/23/03, adopted 11/10/04. ,,II <br /> Comm. hto. ~ S7. <br /> Ref. To:Prosracleod _ <br /> R.el'. ,p ah0~7 <br /> <br />