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4. � Removing harriers to Hawaii's prosperity
May 29, 2024, 5 p.m.
Hawaii County Building
To: Hawaii County Council
Heather Kimball, Chair
Holeka Goro Inaba, Vice-Chair
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From: Grassroot Institute of Hawaii
Jonathan Helton, Policy Researcher €"r
RE: FISCAL YEAR 2024-2025 REAL PROPERTY TAX RATES
Aloha Chair Kierkiewicz, Vice-Chair Inaba and other members of the Council,
The Grassroot Institute of Hawaii would like to offer its comments in support of the proposal to lower fiscal
2025 property tax rates on the homeowner and affordable rental housing tax classes.This is a sound and very
welcome proposal.
Under Mayor Mitch Roth's earlier proposal,the rates for the homeowner and affordable rental housing classes
would have been reduced from $6.15 per$1,000 of assessed value to $5.95 per$1,000.This would have saved
county taxpayers about$2.74 million in the upcoming year.
Grassroot was delighted to learn that the Council has proposed to further reduce the rates on these two
classes, from $6.15 to $5.75 per$1,000. This $0.40 per$1,000 cut would save taxpayers$5.48 million in the
upcoming year, compared to the current rates.
However, we would like to reiterate our suggestion that the Council expand the rate reductions to the
commercial and industrial tax classes.
Both industrial and commercial properties currently are taxed at the rate of$10.70 per$1,000 of assessed
value. We suggest that amount be lowered to $10.05 per$1,000, which is what the rates were in fiscal 2017.1
1 "COUNTY of HAWAII REAL PROPERTY TAX VALUATION for FISCAL YEAR 2016-2017."Real Property Assessment Division,City and County of
Honolulu.
1050 Bishop St.#508 I Honolulu,HI 96813 1 808-864-1776 1 info@grassrootinstitut ;o m, No.��tl
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Ref. To: IMI
1 Ref. Date 2 9 2024
The Council increased the rate for those classes to $10.70 in fiscal 2018.2 Since then, the assessed values of the
properties in those classes have increased significantly.
In 2018, the assessed value of the commercial class was$1.549 billion. Today it is$2.352 billion — a 51%
increase. Likewise, the assessed value of properties in the industrial class increased from $1.077 billion in 2018
to $1.738 billion today — a 61% increase.
These higher assessments translate into higher tax bills. At the same time, Hawaii County business owners and
entrepreneurs have seen their utility, labor and goods costs increase significantly since 2018, so it seems an
appropriate time for the county to grant them some tax relief— one of the few costs for all Hawaii Island
residents that the county can control.
Overall,this reduction would save business owners in the commercial class about$1.528 million and industrial
owners about$1.129 million.These figures, as shown in Table 1 below, represent a drop in the bucket
compared to the proposed almost $1 billion operating budget before the Council.
Table 1: Property tax revenue with suggested adjustments
Class ' Net taxable value Rate Revenue
Affordable Rental 630 906,800 0.00575 $3,627,714
Residential tier 1 9,861,011,300 0.0111 $109,457,225
Residential tier 2 6,575,226,300 0.0136 $89,423,078
Apartment 7,850 155,750 0.0117 $91 846 822
Commercial 2,351,646,150 0.01005 $23,634,044;
Industrial 1,738,404,850 0.01005 $17,470,969
Agricultural 7,122 827,013 0.00935 $66 598 433
Conservation 409,705,600 0.011551 $4,732,100
Hotel and Resort 1,744,591,350 0.01155 $20,150,030
Homeowners 13,075,288,500 0.00575 $75,182,909
Total revenue: $502,123,323{
But again, even if you do not see fit to expand the proposed property tax reductions to industrial and
commercial properties, Grassroot supports this resolution.
Thank you for the opportunity to testify.
Jonathan Helton, Policy Researcher
Grassroot Institute of Hawaii
2"COUNTY of HAWAII REAL PROPERTY TAX VALUATION for FISCAL YEAR 2017-2018." Real Property Assessment Division,City and
County of Honolulu.
1050 Bishop St.#508 I Honolulu,HI 96813 1808-864-1776 I info@grassrootinstitute.org
2