The URL can be used to link to this page

Home My WebLink AboutCOM 0150.060 2012-2014 ifge l of 1 COUNTY CLERKS (nrnL N7 G Murashige, Laura COUNTY OF HAWAIIR7:S. 1I � i"') ( L�iai 27`1 From: Fred Housel [Fred @kieleokona.com] 1013 MAY 14 PH 2: 28 Sent: Monday, May 13, 2013 4:39 PM To: counciltestimony @co.hawaii.hi.us Subject: Testimony on Bill 39 and Property Tax Rates Attachments: Testimony on Bill 39 and Prop Tax Rates F. Housel 5 13 13.docx Attached is my testimony on Bill 39 and Real Property Tax Rates. Mahalo, Fred Housel Comm. No. SO. (o0 Ref. To: ' L/! Ref. Date ,,_ I 5/14/2013 Testimony on Bill 39 and Proposed Property Tax rates Fred House! May 13, 2013 Did We Miss The Headline That The Recession Was Over? Every resident of Hawaii County knows very well that the recession is NOT over, however the Mayor is acting like the recession, which we have been struggling with for the past five years, is over. The Mayor is proposing a 2013 - 2014 Operating Budget of $394.3 million, an increase of$29.2 million, an 8.0 % increase. Did you receive an 8 % increase in your income this year? Most people didn't, in fact many workers on Hawaii Island don't even have a job in 2013. Hawaii County has the highest unemployment rate in the State at 7.6% in March, 2013. Hawaii Island's economy has shown slow improvement in the past year, but many homeowners are still under water with their mortgages Most projections for Hawaii's economic recovery project a long, slow recovery, not a rapid dramatic recovery which would justify the Mayor's $30 million increase in County Operating expenses. The Mayor states that the increased spending is needed to eliminate furloughs and add headcount. Do you remember any complaints of a shortage of County services during the two day a month (10%) furloughs? That's a primary indicator that there is sufficient headcount in most County departments. As in every business, personnel needs do change and resources must be re-allocated to meet the needs. With the elimination of furloughs, there is more than sufficient headcount to provide adequate County services. As we have all experienced over the past five years, we all have to live within our means. Hawaii County needs to live within it's means! As shown by the Finance Department's assessment report, property values have increased approximately 213/0 over the previous year. This was the basis for the March 1, 2013 Preliminary Operating Budget which reflects a 2% increase, not an 8% increase as proposed by the Mayor. In the past ten years, the population of Hawaii County has grown from 156,000 in 2003 to 190,000 in 2012, a21.8 % increase. During the past ten years, the Hawaii County Operating Budget has increased from $196 million in 2003, to $365 million in 2013, an 86.3% increase. Thus, even with accounting for inflation, the Hawaii County Operating Budget has grown 4 times faster than population growth. Hawaii County's Operating expenses are growing, unsustainably, out of control. The Mayor proposes raising most of the $30 million increase by raising property tax rates by approximately 10 %. Two years ago, the Mayor raised property tax rates for Residential, Apartments, Agriculture and Hotels by approximately 30 %. Raising property tax rates another 10% more would result in a 43% increase for many tax payers in the just two years. Apartment owners have to pass on these increased costs to their renters making the cost of renting significantly less affordable for those who cannot afford to buy a home. Likewise, increasing tax burdens by 43% on farmers and ranchers makes success in agriculture more difficult in a low margin business. Hawaii County already has the highest property tax rates in the State. (see pages 3 & 4) In summary, Hawaii County's Operating Budgets and Property Tax Rates have grown uncontrolled with little fiscal discipline. The recession is not over with recovery some years away. Increased taxes will take considerable money out of tax payers pockets and likely have an adverse effect on the recovery. Now is not the time to substantially increase the Hawaii County Operating Budget and Property Tax rates., Hawaii Counties Property Tax Rate Comparison May, 2013 Tax Rates per$1,000 at 100% Market Value Hi Co. Percent Increase(comp Class Hawaii Honolulu Maui Kauai with Honolulu) Improved Residential Building n/a n/a $5.55 n/a 64% Land n/a n/a $5.55 n/a 64°10 Unimproved Residential Building n/a n/a $5.55 n/a 64% Land n/a n/a $5.55 n/a 64% Residential Building $9.10 $3.50 n/a $4.25 160% Land $9.10 $3.50 n/a $3.95 16O% Apartment Building $9.85 $3.50 $5.50 $7.90 181% Land $9.85 $3.50 $5.50 $7.90 181% Hotel/Resort Building $9.85 $12.40 $9.00 $7.90 -21% Land $9.85 $12.40 $9.00 $6.90 -21`'10 Commercial Building $9.10 $12.40 $6.25 $7.90 -27010 Land $9.10 $12.40 $6.25 $7.90 -27% Industrial Building $9.10 $12.40 $7.00 $7.90 -27% Land $9.10 $12.40 $7.00 $7.90 -27% Agricultural Building $8.35 $5.70 $5.80 $4.25 46% Land $8.35 $5.70 $5.80 $4.25 46% Conservation Building $9.85 n/a $5.60 $4.25 76% Land $9.85 n/a $5.60 $6.90 76% Homeowner Building $5.55 $3.50 $2.50 $3.44 59% Land $5.55 $3.50 $2.50 $3.44 59% Affordable Rental Housing Building $5.55 n/a n/a n/a Land $5.55 n/a n/a n/a Hawaii Counties Property Tax Rate Comparison With 10% Increase Tax Rates per$1,000 at 100% Market Value Hi Co. Percent Increase(comp Class Hawaii Honolulu Maui Kauai with Honolulu) Improved Residential Building n/a n/a $5.55 n/a 81 % Land n/a n/a $5.55 n/a 81 Unimproved Residential Building n/a n/a $5.55 n/a 81% Land n/a n/a $5.55 n/a 81% Residential Building $10.05 $3.50 n/a $4.25 187% Land $10.05 $3.50 n/a $3.95 187% Apartment Building $10.85 $3.50 $5.50 $7.90 210% Land $10.85 $3.50 $5.50 $7.90 210% Hotel/Resort Building $10.85 $12.40 $9.00 $7.90 -13% Land $10.85 $12.40 $9.00 $6.90 -13% Commercial Building $10.05 $12.40 $6.25 $7.90 -19% Land $10.05 $12.40 $6.25 $7.90 -19 ',/0 Industrial Building $10.05 $12.40 $7.00 $7.90 -19010 Land $10.05 $12.40 $7.00 $7.90 -19% Agricultural Building $9.25 $5.70 $5.80 $4.25 fit% Land $9.25 $5.70 $5.80 $4.25 62% Conservation Building $10.85 n/a $5.60 $4.25 94% Land $10.85 n/a $5.60 $6.90 94% Homeowner Building $6.15 $3.50 $2.50 $3.44 76% Land $6.15 $3.50 $2.50 $3.44 76% Affordable Rental Housing