COM 0154.001 2006-2008 - Laserfiche WebLink

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Honorable Pete Hoffmann, Chairman Page 2 February 20, 2007 • Ordinance 04 121 limited assessed value increases of properties in the homeowners class to not more than 3% per year. Sent to Council 10/23/03, adopted 11/10/04. • Ordinance 04 121 reduced the dedication period of properties in the non-speculative residential class to 5 years to promote greater pazticipation. The non-speculative residential dedication program allows homeowners to dedicate their properties to non- speculative use and receive a "freeze" on assessed values. Sent to Council 10/23/03, adopted 11/10/04. • Ordinance 04 143 fixed the value of the farm dwelling site to not more than the highest commercial agriculture use value (currently $2,000). Since the farm dwelling site shall not exceed one-fourth acre, the farm dwelling site is assessed at not more than $500. Sent to Council 1/23/03, adopted 11/24/04. Because of the measures that were taken, the severe inflation in values over the last couple of years did not negatively impact homeowners on the Big Island. In FY 2005-06, homeowners actually received reductions in their tax bills at a time when property values were showing double-digit increases. Because of the growth limit on property values, property taxes for homeowners should increase no more than 3% per year. Tax decreases, FY 2006-07. As property values on the Big Island continued to grow, benefits were proposed for properties in other classes that had no limits on assessed values. It was determined that the greatest reductions should go to properties in classes that contained residential rental properties to discourage landlords from raising rents when their tax bills go up. As a result, properties in the apartment, residential, and agricultural classes received the greatest reductions. Properties in the homeowners class were already protected, and thus, received no reductions. CONCLUSION Due to the financial hardship endured by the County during the first three years of Mayor Kim's term, this administration realizes and fully appreciates the importance of properly managing our resources and prepazing for economic downturns when the economy is robust, such as it is today. For the FY 2007-08 budget proposal, we will strive to keep property taxes and the cost of housing affordable for our residents, as we also seek to put money aside for unforeseen disasters or"rainy days". While we appreciate your resolution requesting the Mayor to reduce the FY 2007-08 homeowner property tax rate, the County Council has the ultimate responsibility of setting property tax rates. We firmly believe that the addition of a 20% exemption; the 3% annual limit on valuation for properties in the homeowners class; the opportunity for homeowners to enroll in the non- speculative residential dedication program and obtain a freeze on assessed values; and the flat $500 assessment on the farm dwelling site more than make up for the rate increase of