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Home My WebLink AboutCOM 1046.003 2012-2014P/Pe qV364-14 September 30, 2014 ;�D Hawaii County Council r� 25 Aupuni Street Hilo, HI 96720 t.N) RE: Testimony Against Bill 293 Dear Members of the Hawaii County Council: o My name is Wesley Takai and I worked for the Real Property Division for 39 years (1969 — 2007) as a real property appraiser, supervising appraiser, and the county real property administrator. After retiring, I served five years as a member of the Finance Department's Board of Review which hears assessment appeal cases. I also was a member of two committees that reviewed the real property code, the first committee being in the mid- 1990's during the Yamashiro's administration and the second in the early 2000's during the Kim's administration. Each review took about two years. My testimony on Bill 293 is to urge you not to pass this bill. Attachment #1 is the front page copy of Ordinance No. 04 -123 introduced by Aaron Chung which established the two deadlines for filing home exemptions. One of the purposes of this ordinance was "to establish two windows to file a home exemption claim that would cut the potential waiting period from a maximum of 18 months to 1 year." For decades prior to the passage of this ordinance, there were a number of complaints from taxpayers who filed after the December 31 deadline and had to wait up to 18 months to get the property tax savings benefit of the home exemption. These complaints were made over the counter, to council members, and at appeal hearings. In their annual report to the Mayor and County Council, the members of the Board of Review recommended for several years that the second filing deadline be established. Their recommendation was finally accomplished in November 2004 with the passage of Ordinance 04 -123. The purpose of Bill 293 states that it is to increase the efficiency of the real property tax division by eliminating the one -half year application of the home exemption. I was the real property administrator when Ordinance No. 04 -123 was enacted and wrote the processing procedures to implement the requirements of this new bill. A few procedural modifications were made after the first year but the additional tasking did not have a major impact on the overage workload of the clerical section that was most affected by this new change. The success for this smooth transition was accomplished mainly because of the ""can do" attitude and highly professionalism of all affected employees of the division. It is interesting to note that after my retirement the number of positions in this clerical section, both in the Hilo and Kona offices, decreased from 11 to 9, indicating that the additional tax adjustments created by the second filing deadline continues to have no major impact on the overall workload of the division. Comm. No /0 it -3 Ref. To , Ref. Dote... 4 R What is the property tax impact on a new homeowner? Attachment #2 is an example of the tax calculations for a property with a $200,000 assessed value. The tax rates used on the spreadsheet are the 2014 rates for residential and homeowner classifications. The last row of bolded numbers, $636.00 to $820.50, shows the tax impact for the various age groups, including the amount if the $60,000 exemption is granted as proposed in Bill 294. The range changes $892.50 to $1,077.00 if the assessed value was $300,000. Passage of Bill 293 will increase the county's property tax revenue a little and eliminate the division's tax adjustment task generated by the second filing deadline but at what and whose expense. Clearly, each affected new homeowner will financially suffer the most should Bill 293 pass. So on behalf of homeowners signing home exemptions from early January to June 30 of future years, I urge you to keep the present two filing deadlines as the property tax savings is big for homeowners, especially first time buyers, with a new mortgage and the financial hardships during their first fiscal year of pursuing the American dream of home ownership. If you have any questions on my testimony or if I can be of help in the future on any real property questions, please feel free to contact me. Thank you for your time. Sincerely, WESLEY TAKAI 1222 -E Kaumana Drive Hilo, HI 96720 Phone: 961 -4601 COUNTY OF HAWAII DEPAnT TN1T OE W-JI A CE RQU i ..:.1��V of i / M cc-.,« ..._.. ACTIUNI Cy: - Y...... -.._ FlLrx TAX t =�t STATE OF HAWAII - 3`.� ORDINANCE NO.04 12*3 BILL NO. 320 Draft 4 AN ORDINANCE AMENDING CHAPTER 19 OF THE HA WAIT COUNTY CODE 1983 (1995 EDITION), AS AMENDED, REAL PROPERTY TAXES, RELATING TO HOME EXEMPTIONS. BE IT ORDAINED BY THE COUNCIL OF THE COUNTY OF HAWAII: SECTION 1. The purpose of this measure is (1) to amend section 19 -71, home exemptions, by creating an additional exemption of 20% of the pre - exemption assessed value to a maximum of $80,000 for those eligible for homeowners exemption; (2) to clarify and improve the definition of real property owned and occupied as a principal home; (3) to establish two windows to file a home exemption claim that would cut the potential waiting period from a maximum of 18 months to 1 year, and (4) to allow a portion of a principal home to contain a commercial agricultural use or home occupation. SECTION 2. Chapter 19, Article 10, Section 19- 68(a), Hawaii County Code 1983 (1995 Edition), as amended, is amended to read as follows: "Section 19-68. Claims for certain exemptions. (a) j11 None of the exemptions from taxation granted in sections [44-44-,j 19 -76 to 19 -78 and 19 -89.2 shall be allowed in any case, unless the claimant shall have filed with the department of finance, on or before December 31 preceding the tax year for which such exemption is claimed, a claim for exemption in such form as shall be prescribed by the department. j2) The exemption from taxation granted for disabilities in sections 19 -73 to 19 -75 shall be allowed from the next tax payment date, provided that the claimant shall have filed a claim for the disability exemption along with a copy of the physicians certificate of disability with the department on or before June 30 for the first half payment or December 31 for the second half payment on such form as shall be prescribed by the department. (3) The exemption from taxation eranted for principal home in section 19 71 shall be allowed from the next tax payment date, provided that the claimant shall have filed a claim for the home exemption on or before December 31 for the first half payment or June 30 for the second half payment on such form as shall be prescribed by the department " SECTION 3. Chapter 19, article 10, section 19 -71, Hawaii County Code 1983 (1995 Edition), as amended, is amended to read as follows: "Section 19 -71. Homes. (a) Real property owned and occupied as a principal home [as 9f the, dal 0. Of assNsm shall be exempt to the following extent from property taxes: At�h dt/ N Bill 293 Example September 30, 2014 - Age 70 Age 60 Below Age 60 Below Age 60 $ 100,000 $ 80,000 $ 60,000 $ 40,000 Age Exemption Amount (6111294) $ 200,000 $ 200,000 $ 200,000 $ 200,000 Assessed Value 0.2 0.2 0.2 0.2 20% X AV $ 40,000 $ 40,000 $ 40,000 $ 40,000 , Addtiional Home Exemption I $ 140,000 $ 120,000 $ 100,000 $ 80,000 Total Home Exemption i $ 200,000 $ 200,000 $ 200,000 $ 200,000 Assessed Value of Property 0 0 0 0 Exemption $ 200,000 $ 200,000 $ 200,000 $ 200,000 Net Taxable 0.01005 0.01005 0.01005 0.01005 Res Tax Rate _ $ 2,010.00 $ 2,010.00 ! $ 2,010.00 $ 2,010.00 Annual RP Tax $ 167.50 $ 167.50 $ 167.50 $ 167.50 Monthly RP Tax w/o Exemption $ 200,000 $ 200,000 $ 200,000 $ 200,000 Assessed Value $ (140,000) $ (120,000) $ (100,000) $ (80,000) Total H /Ex _ $ 60,000 $ 80,000 $ 100,000 $ 120,000 Net Taxable $ 60,000 $ 80,000 $ 100,000 $ 120,000 Net Taxable 0.00615 0.00615 0.00615 0.00615 H/O Tax Rate $ 369.00 $ 492.00 $ 615.00 $ 738.00 Annual RP Tax $ 30.75 $ 41.00 $ 51.25 $ 61.50 Monthly RP Tax w/ Exemption $ 136.75 $ 126.50 $ 116.25 $ 106.00 Monthly Difference X 6 X6 X6 X6 $ 636.00 6 Months $ 820.50 $ 759.00 $ 697.50 Current tax savings when exemption given for second half taxes _ or stated in another way Bill 293, if passed, will cost the homeowner $636 to $820.50 more in j taxes the first fiscal year of home occupation