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April 11,2022
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Matt Kanealii-Kleinfelder,Chair
Heather Kimball,Vice-Chair 3
Committee on Finance
Hawaii County Council
Hawaii County Building
25 Aupuni Street, Hilo, HI 96720
RE: Comments on Bill 126—Special Hearing on the Committee on Finance
Dear Chair Kanealii-Kleinfelder,Chair Kimball and Members of the Hawaii County Council, '
Thank you for the opportunity to testify on Bill 126.
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The Kohala Coast Resort Association is requesting some form of legislative relief for the large real property tax
increases we are seeing for 2022-23.We understand that Hawaii Island has seen an increase in property values
across all sectors during the last year, and West Hawaii Today recently quoted Mayor Roth,stating that values were
up 13%overall. But many of the hotel and resort properties along the Kohala Coast are seeing unprecedented YOY
growth,with building values going up by more than 100%, and overall property tax increases over 50%for the vast
majority of our members.
The individual properties have been in discussions with the Real Property Tax office, and the Department of Finance
expressing our concerns, and we appreciate their willingness to discuss this with us.They explained that by statute
they are required to use 100%of market value in their assessments, and the only way to move forward was with
legislative relief.
Many of our members are filing appeals, prior to today's deadline and we are grateful for the county's support of this
appeal process.
We would request that you please consider:
1) Creating a cap in the property tax assessed value,similar to the 3%cap that is placed on the homeowner's
class valuations.This more measured approach would give businesses the ability to rebuild in 2022-23 and
more accurately budget for upcoming years.
2) Lowering the commercial, hotel and resort tax rates for fiscal year 2022-23
We are grateful that the Real Property Tax Office heard our concerns,and lowered some assessments in the hotel J
resort class,while we were closed in the early days of COVID. We understand that there is a need to catch up and are
willing to do our fair share in tax year 2022-23. But this unprecedented jump in values YOY makes it more difficult to
stabilize,especially as we try to rebuild from the significant deficits we undertook in 2020,as we invested in medical
benefits and food programs for our furloughed employees while the visitor industry was completely shut down.
These significant increases also sting,as they come so quickly on the heels of the county's new 3%TAT,and are
happening at the same time as we are seeing significant increases in the cost of doing business in every arena: salary
increases, increases in the cost of family medical benefits,food costs for both our guests and our employee meals,
energy and gasoline costs,construction materials costs and supply chain disruptions.
Comm. No.
Ref, To:.
Ref. ate APR 1 2 2022
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KCRA members employ 5,000 people,supporting 20,000 Hawaii Island residents at their hotels,timeshares,
restaurants, retail outlets,golf courses and spas.Additionally, in 2022, KCRA members will pay an estimated$60
million in state and county TAT,and$40 million in state and county GET. Further, KCRA members,and the residents
within our resorts, paid$73 million in property taxes to Hawaii County last year,one fourth of total property tax
collections.
We are grateful for the opportunity to testify, and your serious consideration of this request.
Sincerely,
Stephanie Donoho
Administrative Director, Kohala Coast Resort Association
PO Box 6991,Karnuela,HI 96743*(808)747-5762*kohalacoastresortassn@ rnall.corn*www.kohalacoastresorts.com