HomeMy WebLinkAbout2020-02-21 Letter to Donovan M. Dela Cruz and Gilbert S.C. Keith-Agaran SB 2054, SD1 Relating to Infrastructure Improvement Districts os Roy Takemoto
Managing Director
Harry Kim
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oi•• , Barbara J. Kossow
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County of Hawai i
Office of the Mayor
25 Aupuni Street,Suite 2603 • Hilo, Hawai'i 96720 • (808)961-8211 • Fax(808)961-6553
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February 21, 2020
Senator Donovan M. Dela Cruz, Chair
Senator Gilbert S.C. Keith-Agaran, Vice Chair
Committee on Ways and Means
Dear Chair Dela Cruz, Vice Chair Keith-Agaran, and Committee Members:
RE: SB 2054, SD1 Relating to Infrastructure Improvement Districts
I respectfully and urgently request that SB 2054, SD1, creating a State surcharge
on certain real property, not move forward.
This bill would implement the constitutional amendment proposed in SB 2074.
As I testified on SB 2074, SD1, I recognize that such a Constitutional provision might
have some superficial political appeal, restricted as it is to the rail corridor. However, no
matter what the potential benefits of SB 2074, SD1, impinging on the counties' singular
source of income would be devastating to us.
As you well know, the counties have little or no control over their revenue except
in one area, real property taxes, and therefore we rely overwhelmingly on real property
taxes to fund our operations. For the County of Hawaii, a full 74% of our revenue is
from property taxes.
The burden of the property tax can be heavy for many residents, but since it is
virtually the only tool we have, we use it the best we can. A surcharge on properties
would obviously limit County options and make it even more difficult to balance our
budgets. Therefore, we have to jealously guard this taxing authority, and ask that you
not break the bright line of separation.
Yes, SB 2074 and this bill are only for rail, so, at least for now, they would only
affect Oahu. But also introduced this year was HB 2671, authorizing DOE to tax real
property statewide. Two years ago, a constitutional amendment passed this Legislature
authorizing the State to tax residential investment property. Who knows what next year
will bring.
County of Hawaii is an Equal Opportunity Provider and Employer.
February 21, 2020
Page 2
The drafters of our Hawaii Constitution must have understood that it was critical
to the viability of the counties that they have exclusive authority over the property tax.
The drafters provided that "The taxing power shall be reserved to the State,
except...relating to the taxation of real property" which "shall be exercised exclusively
by the counties..." If that wall is breached, severe damage will be done to home rule,
we would be ignoring the progress the counties have made since Statehood, and there
would be a crippling of the State/County partnership that has grown over the years in an
imperfect but meaningful attempt to best serve the 1.41 million people of Hawaii.
None of these arguments are meant to downgrade the importance of
infrastructure to Hawai`i's past, present, and future. I simply ask that further progress
not be made on the backs of the counties which have so few alternate resources to fall
back on.
Please hold SB 2054, SD1.
Respectfully Submitted,
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Harry Ki
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MAYOR
County of Hawai'i is an Equal Opportunity Provider and Employer.