HomeMy WebLinkAboutCOM 0394.003 2002-2004NtN cdg%i oft
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Curtis Tyler
R
From: "Cavis/Sertrand" <caberQkona.net>
To: cctylereinterpacmet> . r.
Sent: Monday, November 03, 2003 5:36 PM
Subject: Property Tax Law Revision
To: Harry Kim, Mayor
Curtis Tyler, Council Member
From: John Bertrand (caber@kona.net)
Re' Proposed Changes to Hawaii County Property Tax Law
The Sunday uewspuper urliulc un tic prupubcd changes w die Pruperty Tax law caused uic to du suck
thinking on the subject, which is detailed below;
We have owned property here since 1986 and lived here since 1993. We have an 8 acre farm north of
.Holualoa. �--
1 believe that for a tax system to work well it has to be fair. The proposals to change the property tax
system to be more like California's under Prop. 13, 1 believe, will take a somewhat unfair system and
turn it into a very unfair system. I lived in California through the years leading up to Prop. 13 and for
many years thereafter. Prop. 13 created many problems regarding funding local services which may or
may not apply here. however, any way you look at it, the proposition resulted in a very unfair system of
taxation. As an example, we purchased a used house in the late 70s. The house beside us was built by
.the same contractor, but was slightly newer and slightly larger. Our property tax was about double that
of our neighbor, who was a dentist and well able to pay as much as we were. And that was right at the
beginning of the implementaliun of the law. Now there are discrepancies many times that. Such a system
totally skews the fairness of the property tax and does not discriminate on ability to pay.
I empathize with people whose property values have escalated beyond their ability to pay (and it could
happen to us in the future). But creating a nightmare similar to California is not a good, nor fair answer.
Basing a system on ability to pay would be better, if one could come up with a workable formula. But
I'm not sure that is feasible, since it would require the county to have access to income information,
among other things.
A gygtem which geemg to me to likely be workable would use the present proposal as x baso, but
would add a feature, based on the following premise. When a tax break is given, the property
owner benefits, while the County and taxpayer population as a whole suffers. When the property
sells at an inflated value over what it was being taxed at, the property owner again benefits, while
the County does not.
I would propose that the property owner's tax bill would show two figures. He or she would be
liHble for the one with the tax breaks at this time. The second figure would show what would be
added to the bill without the tax breaks. That figure would accumulate and be due upon sale of the
property. This would allow the social engineering that is behind the present and proposed laws,
while at the same time ultimately treating properties equally. A side benefit of this (as well as with
C .c present proposal) is that it might encourage people to hang onto their properties for the long-
term.
Comm. No.
Ref. To: Ef
Ref. Date 1115103
Z0 39tid 00N L69S9ZE ZE:VT E00Z/0Z/1T
Page 2 of'-)
There world he questions, such as, would the "unpaid" portions of the tax bill be subject to accrued
interest? I would think so, at the lowest rate possible. And could taxpayers be influenced to pay the
higher amount, or somewhere in between, if they are well able to?
There is still a question in my mind about inherited property. Would it be treated as a continuation of
ownership or as a solo? I'm not sure. If the social goal is to keep family farms going or to allow children
already living on the property to retrain, it would best be treated as a continuation.
Under this system is it conceivable that the tax owed upon sale would become a significant part of the
proceeds'? It does not seem likely. The size of the tax accrual would depend on the amount the value
inflates. 1 cannot say with assurance. However, if my present tax breaks of about $500 annually were to
continue for some 20 years, l would owe the County $10,000 if I sold my property at that point. Since
the property would sell today for over $500,000, this does not seem like a significant figure.
Of course, another and simpler solution would be to place a tax on accrued value when a property sells. I
"Ice that idea, but suspect that at the present time state law would not allow it.
I do think overall that property taxes here are pretty reasonable, compared with other states, though they
don't include the education portion found elsewhere. And there is no doubt that we have an
infrastructure deficit in Kona. However, I believe that all residents benefit from county services,
whether social or highway or water or emergency. What we personally are paying now (around
$1400/yr) seems fair in terms of our use of services. I say this, though we live on a rather modest
pension. It seems to me that too many people feel no need to pay their fair share if they can possibly
avoid it.
Now, if you were to ask me if more of those tax dollars should be spent in West Hawaii, I'd M -c - to say:
yes, absolutely.
I hope this information is helpful.
11/5/03
E0 39Vd OON L6999ZE ZE:bT E00Z/0Z/TT
Fax Transmittal
Facsimile: 808.961-8912
Pages: 3
November 20, 2003
TO: Jeanette Aiello, Staff
Finance Committee
FROM: Megan, Aide to �A
J. Curtis Tyler III, Vice Chair
Hawai` i County Council
SUBJECT: Proposed Changes to Hawaii County Property Tax Law
Attached please find an email regarding the subject referenced that Mr. Tyler would
like to have circulated to all Council Members. I don't know if this item is on the
upcoming Finance Committee agenda and for that reason am faxing it to you. The
original will follow by pouch.
If you have any questions, please call me at 327-3666.
JCT/mm r, r
Attachment (1)
�- r
OF h,��q
J�SY
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4•'�W�
J. CURTIS TYLER III
\�a�Jiy,
Bus: (808) 326-5684
Vice Chair
*' '`
Fax: (808).)26-5697
District 8 (Alorth Kona)
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ctyler&iter ac.net
HAWAII COUNTY COUNCIL
Kona Council Office • 77-6399
Nalani Street 'Suite 104 'Kailua-Kona
° Haivai `i
•96740-8980
Fax Transmittal
Facsimile: 808.961-8912
Pages: 3
November 20, 2003
TO: Jeanette Aiello, Staff
Finance Committee
FROM: Megan, Aide to �A
J. Curtis Tyler III, Vice Chair
Hawai` i County Council
SUBJECT: Proposed Changes to Hawaii County Property Tax Law
Attached please find an email regarding the subject referenced that Mr. Tyler would
like to have circulated to all Council Members. I don't know if this item is on the
upcoming Finance Committee agenda and for that reason am faxing it to you. The
original will follow by pouch.
If you have any questions, please call me at 327-3666.
JCT/mm r, r
Attachment (1)
�- r
•
Curtis Tyler
From: "Cavis/Bertrand" <caber@kona.net>
To: <ctyler@interpac.net>
Sent: Monday, November 03, 2003 5:36 PM
Subject: Property Tax Law Revision
To: Harry Kim, Mayor
Curtis Tyler, Council Member
From: John Bertrand (caber@kona.net)
Re: Proposed Changes to Hawaii County Property Tax Law
�q_A$ 1 oft
The Sunday newspaper article on the proposed changes to the Property Tax law caused me to do some
thinking on the subject, which is detailed below:
We have owned property here since 1986 and lived here since 1993. We have an 8 acre farm north of
Holualoa. `
I believe that for a tax system to work well it has to be fair. The proposals to change the property tax
system to be more like California's under Prop. 13, I believe, will take a somewhat unfair system and
turn it into a very unfair system. I lived in California through the years leading up to Prop. 13 and for
many years thereafter. Prop. 13 created many problems regarding funding local services which may or
may not apply here. However, any way you look at it, the proposition resulted in a very unfair system of
taxation. As an example, we purchased a used house in the late 70s. The house beside us was built by
the same contractor, but was slightly newer and slightly larger. Our property tax was about double that
of our neighbor, who was a dentist and well able to pay as much as we were. And that was right at the
beginning of the implementation of the law. Now there are discrepancies many times that. Such a system
totally skews the fairness of the property tax and does not discriminate on ability to pay.
I empathize with people whose property values have escalated beyond their ability to pay (and it could
happen to us in the future). But creating a nightmare similar to California is not a good, nor fair answer.
Basing a system on ability to pay would be better, if one could come up with a workable formula. But
I'm not sure that is feasible, since it would require the county to have access to income information,
among other things.
A system which seems to me to likely be workable would use the present proposal as a base, but
would add a feature, based on the following premise. When a tax break is given, the property
owner benefits, while the County and taxpayer population as a whole suffers. When the property
sells at an inflated value over what it was being taxed at, the property owner again benefits, while
the County does not.
I would propose that the property owner's tax bill would show two figures. He or she would be
liable for the one with the tax breaks at this time. The second figure would show what would be
added to the bill without the tax breaks. That figure would accumulate and be due upon sale of the
property. This would allow the social engineering that is behind the present and proposed laws,
while at the same time ultimately treating properties equally. A side benefit of this (as well as with
the present proposal) is that it might encourage people to hang onto their properties for the long-
term.
11/5/03
Page 2 of 2
There would be questions, such as, would the "unpaid" portions of the tax bill be subject to accrued
interest? I would think so, at the lowest rate possible. And could taxpayers be influenced to pay the
higher amount, or somewhere in between, if they are well able to?
There is still a question in my mind about inherited property. Would it be treated as a continuation of
ownership or as a sale? I'm not sure. If the social goal is to keep family farms going or to allow children
already living on the property to remain, it would best be treated as a continuation.
Under this system is it conceivable that the tax owed upon sale would become a significant part of the
proceeds? It does not seem likely. The size of the tax accrual would depend on the amount the value
inflates. I cannot say with assurance. However, if my present tax breaks of about $500 annually were to
continue for some 20 years, I would owe the County $10,000 if I sold my property at that point. Since
the property would sell today for over $500,000, this does not seem like a significant figure.
Of course, another and simpler solution would be to place a tax on accrued value when a property sells. I
like that idea, but suspect that at the present time state law would not allow it.
I do think overall that property taxes here are pretty reasonable, compared with other states, though they
don't include the education portion found elsewhere. And there is no doubt that we have an
infrastructure deficit in Dona. However, I believe that all residents benefit from county services,
whether social or highway or water or emergency. What we personally are paying now (around
$1400/yr) seems fair in terms of our use of services. I say this, though we live on a rather modest
pension. It seems to me that too many people feel no need to pay their fair share if they can possibly
avoid it.
Now, if you were to ask me if more of those tax dollars should be spent in West Hawaii, I'd have to say:
yes, absolutely.
I hope this information is Helpful.
11/5/03