HomeMy WebLinkAboutCOM 0113.003 2022-2024 -P/Fc
6111 28
COMM.1 I�
From: Jonathan Helton
Sent: Tuesday, March 07, 2023 5:57 PM COUNTY CLERIC
To: Council Testimony COUNTY OF HAWAII
Subject: Re:Testimony: Bill 28 in Finance Committee RECEIVED
(Of
Attachments: Testimony Bill 28.pdf The L
yi AI; 0 8 7023
Aloha-
I'm attaching a revised version of the testimony, since I found a few errors in the previous version. I know the
council has already heard the bill,but I figured I might as well send over a corrected version so you could
include it on the website for public record.
Mahalo,
Jonathan
On Mon, Mar 6, 2023 at 4:03 PM Jonathan Helton<ihelton@grassrootinstitute.org>wrote:
Aloha!
Attached is testimony on Bill 28,which is being heard in Finance Committee tomorrow.
Sorry it's a tad late.
Mahalo,
Jonathan
Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii •
1050 Bishop St, #508
Honolulu; HI 96813
(808) 864-1776 I (931)561-7124
Subscribe to newsletter I Make a one-time gift
This electronic message transmission contains information that may be confidential or privileged.The information is intended solely for the recipient and use
by any other party is not authorized.If you are not the intended recipient,be aware that any disclosure,copying,distribution of the contents of this •
information is prohibited.If you have received this electronic transmission in error,please notify us immediately by telephone at 808-864-176 or by electronic
mail to info@grassrootinstitute.org
Cornet NQS 11 r
P�Pcr,
1 Rei."��te MAR 7 2023_
7ti fOW
Fir); t iP j I kir 'PI
March 7, 2023
10:30 a.m.
Hawaii County Building
To:Committee on Finance
Councilmember Matt Kaneali'i-Kleinfelder,Chair
Councilmember Cindy Evans,Vice Chair
From: Grassroot Institute of Hawaii
Jonathan Helton, Policy Researcher
RE: Bill 28 — RELATING TO REAL PROPERTY TAXES
Comments Only
Dear Chair and Committee Members:
The Grassroot Institute of Hawaii would like to offer its comments on Bill 28, which would allow
owner-occupied homes on parcels in the "agricultural or native forests" class to qualify for the
homeowner tax class.
It also would allow affordable long-term rentals on agricultural land to be taxed as if they fell
under the "affordable rental housing" class.
This measure is a welcome one, since Hawaii County saw its real property tax revenue increase
by more than $72 million — more than 19% — between fiscal years 2022 and 2023.1
With increased property assessments combined with inflation taking a toll on many Hawaii
County property owners,this bill would allow more Hawaii island residents to qualify for the
county's homeowner tax class, which entails a lower rate and an assessment cap — a
mechanism that protects homeowners from dramatic swings in property assessments.
"County of Hawaii Real Property Tax Valuation for Fiscal Year 2021-2022," Real Property Assessment
Division, Department of Budget and Fiscal Services, City and County of Honolulu; and"County of Hawaii
Real Property Tax Valuation for Tax Year 2022-2023," Real Property Assessment Division, Department of
Budget and Fiscal Services, City and County of Honolulu,August 2022.
Expanding eligibility for the assessment cap would be a good step toward providing Hawaii
County residents relief from rising property taxes.
Since Hawaii County has a large number of housing units on parcels designated as agricultural '
or native forests, this measure creates fairness among owner-occupied households. No longer
would someone living on land classed as agricultural be ineligible for the protections the
homeowners tax class brings with it.
As the committee looks at further changes to the real property tax system, it is worth noting
that Honolulu, Kauai and Maui all offer home exemptions much higher than Hawaii's —
$100,000, $160,000 and $300,000, respectively.'
Even though Hawaii County's real estate prices are usually lower than in other parts of the state,
the upcoming assessments might show that there is room to increase the homeowner
exemption above$50,000.3 Should this occur, county residents would be the direct
beneficiaries. -
Finally, allowing affordable rentals on agricultural-classed land to be taxed as affordable rental
housing should lower rates on these properties. In fiscal year 2023, the agricultural class paid a
$9.35,per$1,000 rate, while affordable rental housing paid $6.15 per$1,000.4
As we explain in a forthcoming report on property tax relief, Hawaii's four counties can provide
assistance to homeowners, renters and business owners in many ways,from rate cuts to
exemptions to tax credits.
A rate cut is the most straightforward way to provide tax relief, as it avoids the hassle of making
property owners and county employees do extra paperwork; however, increasing the eligibility
for the homeowner tax class — as Bill 28 does — is also a way to provide tax relief.
We appreciate that the committee has taken up this timely matter and look forward to
continuing dialogue on how to lower the burden of the property taxes for Hawaii's
homeowners.
2"Home Exemption and Other Common Tax Relief Programs," Real Property Assessment Division,
Department of Budget and Fiscal Services, Honolulu City and County, accessed March 2, 2023; Kauai
County Code,Article 11. Exemptions, Sec. 5A-11.4 Homes; and Maui County Code of Ordinances,
Chapter 3.48,Article IX. 3.48.450-Homes—standards for valuation, accessed Feb. 23, 2023.
3 "Important Information on County of Hawaii Real Property Tax," Hawaii County, updated January 2023.
4"Real Property Tax Rates for Tax Year July 1, 2022 to June 30, 2023," Real Property Assessment
Division, Department of Budget and Fiscal Services, City and County of Honolulu.Aug. 2022.
Thank you for the opportunity to testify.
Sincerely,
Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii