CA-0019 - New Section to Article X (Financial Procedures)

Home

Justification for CA Title: A proposal to lessen inequality in property taxation Current Situation: The County of Hawaii property tax system, developed to benefit plantations, large estates, and ranches, has allowed large land owners to minimize their property tax burden by use of agriculture dedications and assessments even when their agricultural activities are minimal because the required evidence of agricultural use is ill-defined /undefined. This has led to extreme inequalities of treatment of taxpayers (i.e., the wealthy pay a much lower of market value in taxes than do poor and middle-class taxpayers). The $200 per parcel per annum minimum property has exacerbated these inequalities. This proposal only concerns minimum tax, not the larger issue. Three tables are provided on the next page comparing a randomly selected large (1400+ acre) parcel in Hamakua and an 8,000 ft2 lot which I inherited in Nanawale. The numbers are from the Tax Office website. TMKs can be provided. Here are some are the conclusions: • Based on assessed value, Nanawale land owners pay 5% of their land value per year in minimum property tax • The Hamakua parcel pays only 0.935% of its assessed value in minimum tax • If % of market price is the basis, the Nanawale taxpayer pays 66 times as much as the Hamakua land owner. • The Nanawale taxpayer pays $1,083 per acre vs $0.68 per acre for the Hamakua land -owner, a difference of 1548 times. • A land -owner in dedicating 292 acres of land to pasture will pay the same $200 as the farmer growing vegetables on an 8,000 ft2 lot in Nanawale. • Note that this only effects parcels valued at less than about $18,018 to $21,390 depending on the zoning. • I realize that this will reduce tax revenues slightly but which land -owner has more money? The poorer landowners are now subsidizing the m illionaires. Form CA -1 Revised 8/29/18 4 of 5