LIHU‘E — A proposal to raise the minimum real property tax by 500 percent on Kaua‘i died in the hands of the Kaua‘i County Council’s Finance and Economic Development Committee Wednesday.
The bill would have raised the minimum real property tax paid on Kaua‘i to $150 from $25. But after a lengthy discussion, the committee opted to receive the bill, which means it was shelved without action, effectively killing it.
Though the proposal will likely resurface with a different structure next month, whatever comes out of it may not affect taxpayers in the next fiscal year, starting July 1, because there is limited time to work on it, according to Committee Chair Tim Bynum.
Bill 2444, first introduced Aug. 22 by request of the Cost Control Commission, went through several deferrals until reaching a flatline Wednesday.
“We were looking at the fact that these people still get police and fire protection,” Cost Control Commissioner Sandi Sterker said of those paying $25 in annual property taxes. “In order to have our police and fire (departments) be efficient, they need to have money.”
She said that to have public safety personnel running properly, tax revenues have to be raised, and other tax classes are the ones who are always paying the bill, so the services are still provided.
“We just are looking at this as a small fee for the services that are provided for our community,” Sterker said.
Besides raising taxes for some 447 Hawaiian homestead families and some 22 residents of kuleana lands, the bill would target other categories of taxpayers, including disabled veterans, owners of properties with low value and nonprofit organizations. The total number of affected properties would be nearly 2,500, according to Steve Hunt, from the county Real Property Division.
Former Councilman KipuKai Kuali‘i, a Native Hawaiian, returned to the chambers, this time as a private citizen, to show his opposition to the bill. He asked the council not to raise property taxes on Kaua‘i’s “most vulnerable populations.”
Kuali‘i said that regarding the bill, he recently heard community members saying it would create another obstacle to keep Hawaiians from their lands; that they are the ultimate “pay it forward” population, as 96 percent of aboriginal lands are under state control; that homelands are a birthright to them, and it’s not right to tax them; and that the state and the county have benefited immeasurably from the uncompensated and under-compensated use of Hawaiian lands, and are indebted to Hawaiians with a debt they will never be able to repay.
Sherry Cummings-Yokotake brought with her a group of students from Anahola’s Kanuikapono Charter School, to voice their opposition to the bill. The children sang “The Queen’s Jubilee,” composed by Queen Lili‘uokalani more than 120 years ago to celebrate the 50th anniversary of England’s Queen Victoria.
‘We deserve everything different’
DHHL leases Homestead lands at $1 per year to Native Hawaiians who have at least 50 percent of Hawaiian blood quantum.
Cummings-Yokotake said she spent Tuesday night trying to figure out how the county charges property taxes. For Hawaiian homesteaders, she said, their lands have no fair market value.
“So I cannot see the justification of the $25 to begin with, but the 500 percent increase to $150,” said Cummings-Yokotake, adding that Hawaiian homesteaders can’t do anything with their lands, because they are not able to mortgage it, according to the Hawaiian Homes Commission Act of 1920.
She questioned how did the Cost Control Commission come up with the $150 amount. Some of the reasoning came from a $75 cost to the county to process assessments for every person billed, she said.
“But I think we need to come back the next time to you guys and tell you guys about all the gratis lands that you guys have of ours,” Cummings-Yokotake said of crown lands.
The administration, she said, tries to justify raising taxes with public services such as public safety “and all that good stuff,” but the Hawaiian lands are free for a lot of the public services that everyone benefits from, not just Native Hawaiians.
“So to all the bangers that say that we want to be treated different, you’re right, we want to be treated different. We deserve everything different,” she said.
To amend or to receive it?
Committee members discussed at length whether to receive or amend the bill. Most agreed that Kaua‘i’s minimum tax rate, the lowest in the state and set in 1975, needs a revision. But they wanted to split the minimum tax into different categories.
Much of the indecision on how to proceed anchored on if there would be enough time to work out the kinks or to craft a new bill that could be implemented into next fiscal year.
Deputy County Attorney Amy Esaki said if the council wanted to break down the categories of taxpayers who pay minimum taxes, it would require a new bill rather than introducing amendments.
The intent of the bill was to apply a $150 minimum property tax across the board, and by splitting a minimum tax into different categories would mean a substantial change in the bill, prompting a new proposal, she said.
Bynum said that by receiving the bill and crafting a new one, it was “very unlikely” that a new bill would be worked in time to go into effect next fiscal year.
The committee unanimously received the bill.
Administrative leave vs. added revenue
While committee members were discussing the Cost Control Commission proposal to raise taxes to the elderly, disabled, nonprofits and Native Hawaiians, in order to bring more revenue to the county, Councilman Mel Rapozo disclosed a memorandum from the administration.
Mayor Bernard Carvalho Jr., “in keeping with the spirit of the holiday season,” and to thank county workers for all their “hard work throughout the year,” is granting eight hours of administrative leave to all county employees, as written in a memorandum addressed to all county employees and signed by Carvalho on Nov. 28.
“We can’t be that broke,” Rapozo said of Carvalho’s offer of giving a full day of administrative leave to all county employees.
Considering that the county’s budget for all salaries for the current fiscal year is roughly $67.5 million, an administrative leave for all county workers, counting only roughly 266 working days in a year, would cost the county about $250,000.
If Bill 2444 had been approved, it would raise tax revenues taken from 447 Hawaiian Homesteaders to approximately $67,050 from the current roughly $11,175.
If there are about 2,500 taxpayers who pay the minimum $25 property tax, the county currently collects approximately $62,500 from them. If the proposal had passed, the county would have raised that revenue to $375,000.
• Léo Azambuja, staff writer, can be reached at 245-3681 (ext. 252) or lazambuja@ thegardenisland.com.