HomeMy WebLinkAboutCOM 0787.001 1996-1998
ON,v os N1k,.
DONALD IKEDA C ALAN S. KONISHI
County Clerk - Deputy County Clerk
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CONSTANCE R. KIRIU
OFFICE OF THE COUNTY CLERK Legislative Auditor
County of Hawaii -
Hawaii County Building C)
25 Aupuni Street r
Hilo, Hawaii 96720
April 8, 1998
TO: Councilman Aaron S.Y. Chung, Chair
Committee on Finance
FROM: Liana Cox and Walter Iida, Legislative Assistants
RE: Real Property Tax Revenues
In response to interest and concern expressed by several Council Members during the special Finance Committee
meetings on departmental reviews, our office, in conjunction with the Real Property Tax Division (see Comm. No.
787), has examined two possible proposals which would achieve a "revenue-neutral" and revenue producing tax
base within specific categories. The two proposals look at the Homeowner Class tax rate and those parcels subject
to the minimum property tax.
The following is a report containing figures which reflect slight increases in the aforementioned rates while
providing for a revenue-neutral/producing tax base.
1. Raise the Homeowner Class Tax Rate of $4.45/$1,000 of assessed valuation.
According to actual 1997 figures provided by the Real Property Tax Division (see Comm. No. 787), 24,425
Homeowner Class properties were valued at $2,028.576.138 (net taxable building and land) which generated
$9,027,164 in revenues to the County or a total of about 11 percent of total real property taxes. In last year's
operating budget, a total of $80,234,500 was anticipated to be collected exclusive of delinquent taxes.
For tax year 1998-1999, the total real property tax collections, exclusive of delinquent taxes, are projected to be
$78,200,000. In Comm. No. 787, Real Property Tax Administrator Gary Kiyota estimated that the total assessed
valuation of 25,094 Homeowner Class parcels would be $2,001,628,752. Thus, $8,907,248 would be generated in
revenues by maintaining the Homeowner Class tax rate of $4.45/$1,000. This means that 1998-1999 Homeowner
Class revenues will decrease by nearly $120,000.
As exhibit A reflects, the shortfall in revenue may be remedied by increasing the current rate by ten cents to $4.55.
Considering this figure, the average taxpayer who currently pays about $369.59 can expect to pay $362.93, an
average decrease of $7. This decrease can be attributed to an increase in the number of taxable parcels. The
schedule also reflects revenue projections in the Homeowner Class if the tax rates were raised using incremental
increases.
For the Council Member's information, changing the real property tax rates must follow the procedures set forth in
Chapter 19, article 11, section 19-90, Hawaii County Code, as amended, which provides for the establishment of tax
rates by resolution of the council.
PLa
APR ; 1.998
lI. Raise the Real Property minimum tax rate of $25.
The Real Property Tax Administrator informs that 13,189 parcels are currently subject to the minimum tax. The
previous minimum tax of $7 was increased by ordinance in 1990 to $25 to cover rising administrative costs,
however, this fee is insufficient according to testimony before the Finance Committee in March. The following
schedule reflects projected revenue increases associated with raising the minimum tax, but does not take the amount
of unpaid taxes into account.
&IQ Revenue Revenue Increase
$25t $329,725 $0
$30 $395,670 $65,945
$40 $527,560 $197,835
$50 $659,540 $329,725
$60* $791,340 $461,615
$70 $923,230 $593,505
$80 $1,055,120 $725,395
$90 $1,187,010 $857,285
$100** $1,318,900 $989,175
t Min. tax for Hawaii and Kauai Counties
* Min. tax for Mauai County
Min. Tax for City and County of Honolulu
To change the minimum tax rate would require an amendment to Article II, section 19-90(g), Hawaii County Code.
As stated previously, this report examines only two possible scenarios. We have not researched other options such
as other classes of property tax rates and exemptions as delineated in Exhibits B and C (attached).
Should you have any questions, please feel free to call.
APPROVED:
Constance R. Kirin
Legislative Auditor
Attach.
CC w/attach: Mr. Gary Kiyota, Real Property Tax Administrator
2
(Exhibit A)
*HOMEOWNERS CLASS TAX RATE SCENARIOS FOR FY 98-99
estimated projected estimated average increase in
rate per net value tax revenue number tax per average tax
RATE $ 1,000 land + building revenues increases parcels parcel per parcel
0.00445 $4.45/$1,000 $ 2,001,628,752 $8,907,248 $ - 25,094 $354.96 $0.00
0.00450 $4.50/$1,000 $ 2,001,628,752 $9,007,329 $ 100,081 25,094 $358.94 $3.99
0.00455 $4.55/$1,000 $ 2,001,628,752 $9,107,411 $ 200,163 25,094 $362.93 $7.98
0.00460 $4.60/$1,000 $ 2,001,628,752 $9,207,492 $ 300,244 25,094 $366.92 $11.96
0.00465 $4.65/$1,000 $ 2,001,628,752 $9,307,574 $ 400,326 25,094 $370.91 $15.95
0.00470 $4.70/$1,000 $ 2,001,628,752 $9,407,655 $ 500,407 25,094 $374.90 $19.94
0.00475 $4.75/$1,000 $ 2,001,628,752 $9,507,737 $ 600,489 25,094 $378.88 $23.93
0.00480 $4.80/$1,000 $ 2,001,628,752 $9,607,818 $ 700,570 25,094 $382.87 $27.92
0.00485 $4.85/$1,000 $ 2,001,628,752 $9,707,899 $ 800,652 25,094 $386.86 $31.91
0.00490 $4.90/$1,000 $ 2,001,628,752 $9,807,981 $ 900,733 25,094 $390.85 $35.89
0.00495 $4.95/$1,000 $ 2,001,628,752 $9,908,062 $ 1,000,814 25,094 $394.84 $39.88
0.00500 $5.00/$1,000 $ 2,001,628,752 $10,008,144 $ 1,100,896 25,094 $398.83 $43.87
0.00505 $5.05/$1,000 $ 2,001,628,752 $10,108,225 $ 1,200,977 25,094 $402.81 $47.86
0.00510 $5.10/$1,000 $ 2,001,628,752 $10,208,307 $ 1,301,059 25,094 $406.80 $51.85
0.00525 $5.25/$1,000 $ 2,001,628,752 $10,508,551 $ 1,601,303 25,094 $418.77 $63.81
0.00550 $5.50/$1,000 $ 2,001,628,752 $11,008,958 $ 2,101,710 25,094 $438.71 $83.75
0.00575 $5.75/$1,000 $ 2,001,628,752 $11,509,365 $ 2,602,117 25,094 $458.65 $103.69
0.00600 $6.00/$1,000 $ 2,001,628,752 $12,009,773 $ 3,102,525 25,094 $478.59 $123.64
0.00625 $6.25/$1,000 $ 2,001,628,752 $12,510,180 $ 3,602,932 25,094 $498.53 $143.58
0.00650 $6.50/$1,000 $ 2,001,628,752 $13,010,587 $ 4,103,339 25,094 $518.47 $163.52
0.00675 $6.751$1,000 $ 2,001,628,752 $13,510,994 $ 4,603,746 25,094 $538.42 $183.46
0.00700 $7.00/$1,000 $ 2,001,628,752 $14,011,401 $ 5,104,153 25,094 $558.36 $203.40
0.00725 $7.251$1,000 $ 2,001,628,752 $14,511,808 $ 5,604,561 25,094 $578.30 $223.34
0.00750 $7.50/$1,000 $ 2,001,628,752 $15,012,216 $ 6,104,968 25,094 $598.24 $243.28
0.00775 $7.75/$1,000 $ 2,001,628,752 $15,512,623 $ 6,605,375 25,094 $618.18 $263.23
0.00800 $8.001$1,000 $ 2,001,628,752 $16,013,030 $ 7,105,782 25,094 $638.12 $283.17
*data provided by Real Property Tax Administrator Gary Kiyota
(Exhibit B)
The following schedule reflects aggregate values of real property for the various classes in the County of
Hawaii assessable for tax purposes as of April 18, 1997, certified and famished by the Director of
Finance.
Value of Net
Value of Net Value of Net Taxable Real
Classes of Property Taxable Buildings Taxable Land Property
Improved Residential $ 713,929,759 $ 1,080,754,935 $ 1,794,684,694
(B) Apartment 837,311,254 381,468,007 1,218,779,261
(C) Commercial 418,672,188 394,193,520 812,865,708
(D) Industrial 184,015,964 202,721,697 386,737,661
(E) Agricultural or Native Forest 717,233,174 1,622,308,402 2,339,541,576
(F) Conservation 19,740,750 277,292,761 297,033,511
(G) Hotel and Resort 496,133,328 464,217,428 960,350,756
(H) Unimproved Residential 28,096,340 292,206,766 320,303,106
(I) Homeowners 901,861,607 1,124,744,685 2,026,606,292
TOTAL ALL CLASSES $4,316,994,364 $5,839,908,201 $10,156,902,565
The following schedule reflects revenues to be derived within the net taxable buildings and the net
taxable land of each class.
Value of Net
Value of Net Value of Net Taxable Real
Classes of Property Taxable Buildings Taxable Land Property
(A) Improved Residential $ 6,068,403 $ 9,186,417 $ 15,254,820
(B) Apartment 7,117,146 3,814,680 10,931,826
(C) Commercial 3,558,714 3,941,935 7,500,649
(D) Industrial 1,564,136 2,027,217 3,591,353
(E) Agricultural or Native Forest 6,096,482 16,223,084 22,319,566
(F) Conservation 167,796 2,772,928 2,940,724
(G) Hotel and Resort 4,217,133 4,642,174 8,859,308
(H) Unimproved Residential 238,819 2,922,068 3,160,887
(I) Homeowners 4,013,284 5,005,114 9,018,398
TOTAL ALL CLASSES $33,041,913 $50,535,617 $83,577,529
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