2017-03-21 Letter to Scott Y. Nishimoto re SB 683 SD 2 Proposing Amendments to Articles Vll and X of the Constitution of the State of Hawai'i

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Harry Kim Mayor Wil Okabe Managing Director Barbara I Kossow Deputy Managing Director AT Qwunfv ofe"Ri tTttt't (Offirr, of fhr,,TCttgor 25 Aupuni Street, Suite 2603 • Hilo, Hawaii 96720 a (808) 961.8211 a Fax (808) 961-6553 KONA: 74-5044 Ane Keohokalolc Hwy., Bldg. C a Kailua-Kona, Hawaii 96740 (808) 323-0444 • Fu(808)323-4440 March 21, 2017 Rep. Scott Y. Nishimoto, Chair Committee on Judiciary Hawai'i State Capitol Honolulu, HI 96813 Dear Chair Nishimoto and Members: RE: SB 683 SD 2 Proposing Amendments to Articles VII and X of the Constitution of the State of Hawaii to Authorize the Legislature to Establish a Surcharge on Residential Investment Property and Visitor Accommodations to Increase Funding for Public Education As a former teacher myself, I fully appreciate the efforts of this Legislature to properly fund education. However, I cannot support S13683, SD 2, and must speak against it. Effect on Real property tax. The County of Hawaii, as is true of the other counties, has little or no control over its revenue except in one area, real property taxes, and the County relies overwhelmingly on real property taxes to fund its operations. The burden of that tax can be heavy for many residents, but since it is virtually the only tool we have, we use it the best we can. A surcharge on residential investment properties would obviously limit County options and make it even more difficult to balance our budgets. Therefore, we have to jealously guard this taxing authority, and ask that you not breach this line of authority. Effect on TAT. Given our County's limited resources, we are fortunate that the Legislature has seen fit to allow the counties to share in the TAT. That has been a great help, and we thank you for it. However, this source of revenue is under constant pressure, and even this session the Legislature will be asked to increase the counties' share of TAT so that we County of Hawaii is an Equal Opportunity provider and Employer.