HomeMy WebLinkAboutCOM 0820.012 2020-2022 P/S. Council
Rte.t425-22
Gam. 820
1<oha l Coast
RESORT ASSOCIATION
June 1,2022 ° Cam
Cio
Maile David, Chair
Aaron Chung,Vice Chair -- C-‹
Hawaii County Council
Hawaii County Building
25 Aupuni Street,Hilo,HI 96720 0?
1/4,43
Comments on 432-22 and Bill 126 Draft 2—Real Property Tax Rates July 1,2022—June 30,2022
Dear Chair David,Vice-Chair Chung,and Members of the Hawaii County Council,
On behalf of the Kohala Coast Resort Association,we deeply appreciate the Roth administration's proposal,outlined in Bill 126
Draft 2,providing significant decreases in'property tax rates for a wide variety of classes, beginning July 1,2022.We testified in
support of that proposal,and encourage the Council to move forward as outlined,to provide relief to Hawaii Island's businesses
as we work to stabilize our economy.
While we appreciate Councilmember Inaba's intention with Resolution 432-22,we believe this is the wrong avenue to address
escalating valuations.Taxpayers in the homeowners'class are already seeing a significant savings over their 2022 valuations,as
property tax increases in that class are capped at 3%,though values increased by 14%.No such cap exists for the other classes.
That's why we previously supported Bill 156 which would provide a 15%cap on valuations in future tax years,allowing
businesses to appropriately plan and budget.
Our hotel and resort members had significant losses in 2020 when the visitor industry was completely shut down.We invested in
medical benefits and food programs for our furloughed employees,spending more than$30 million,with zero income. Last year
was also a challenge,with the surge of the delta variant,as Governor Ige told visitors not to travel to Hawaii during what is
typically our busy summer season.And while we are hopeful that 2022 will continue to be a year of rebuilding and stabilization,
we are justifiably wary,as COVID cases climb locally,which impacts our employees,and our ability to maintain normal business
operations.And we are still awaiting the return of international visitors,as countries adjust their COVID-19 protocols to address
ever-changing conditions.UHERO has estimated that it will be 2024 before the visitor industry fully recovers.
Businesses are seeing significant increases in the day-to-day costs of operations in nearly 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 delays;supply chain disruptions;the new Hawaii County TAT implemented in January 2022;and
now,significant increases in real property tax values in 2022-23.Our members estimate that the overall cost of doing business
has increased by 40%during the last year.
Across the Kohala Coast,we had seven properties that saw the value of their buildings increase by 50%or more.One hotel saw
the value of its buildings increase by 124%!These types of increases make it incredibly difficult to plan and budget and are not
sustainable long term.
These gains in values are only realized if a property is sold,to a willing buyer.The Finance Department and Real Property Tax
office have shared that this transfer of assets happens less frequently with businesses than it does with residences,and it is
therefore more difficult to determine actual property values. In the case of the hotel/resort class,comps from other islands are
used to establish tax values,as there are such a limited number of transactions each year.
Please,recognize the impacts your decisions have on our business community.Nearly 800 entities filed appeals of their
property tax rates this year,almost twice the number of previous years,and nearly all of those appeals were filed by
businesses.We need your assistance,and we need it now.
Comm. No? 0 t2
Ref.To: P hat
Ref. Date J JV! - 8 2022
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, nearly one fourth of total property tax collections.
Sincerely,
Stephanie Donoho
Administrative Director,Kohala Coast Resort Association
PO Box 6991,Kamuela,HI 96743*(808)747-5762*kohalacoastresortassn@gmail.com*www.kohalacoastresorts.com