• Walter Lewis Walter Lewis Kauai County relies on its real property tax system to provide more than half of its annual revenue. County spending has increased about 50% in the past five years and taxes have also increased about
• Walter Lewis
Walter Lewis
Kauai County relies on its real property tax system to provide more than half of its annual revenue. County spending has increased about 50% in the past five years and taxes have also increased about the same. Under the tax law except for heavily lobbied special rules for golf courses and time shares, properties are to be assessed at 100% of their market value. Unfortunately, in practice, assessments have ranged anywhere from 30% to 100% of market price, creating chaotic imbalances and resulting in huge tax increases for some taxpayers. It is time to change this capricious system.
The Ohana Kauai charter amendment proposal to be adopted at the November 2004 General Election, will for residents owning and occupying their home, restore their property taxes to the amount at the time of their acquisition of their home, or 1998 if later, and allow not more than a 2% annual increase thereafter. This proposal will reduce the property tax burden of over 10,000 island families and end their anxiety about massive future increases
We are writing this article to alert citizens that the County is now orchestrating the dissemination of unwarranted and misleading comments about the Ohana proposal. Let us mention a few.
A purported analysis of the Ohana measure was released by the County Finance Department in May. Ohana was given no notice of the analysis nor any opportunity to offer comments on it. It concludes that there would be a County revenue loss in fiscal year 2004-05 (the current year) due to the Ohana measure of up to $6.3 million This erroneous conclusion was based on false and irresponsible assumptions. Importantly the analysis wrongly assumed the repeal of two measures the Council is currently seeking to extend and strengthen to aid resident homeowners and without any justification sought to include in the revenue lost category properties other than residences owned by Kauaians. The real impact of the Ohana measure will be only a modest fraction of that portrayed by County scaremongering.
The Ohana group concurs that it is important to have a reasonable projection of the financial effect of its proposal and it has been seeking appropriate information from the County for this purpose for several months.. This data would disclose simultaneously the effect on County revenues and the benefit that will be derived by our taxpayers. Kauai s real property tax laws are a jungle. A few of its anomalies are: The Federal Internal Revenue Service publishes regulations and opinions interpreting the law, Kauai s tax department does not. One of its classifications is the Homestead properties, but homestead exemptions are also found in other classifications. Property tax data is largely on its computers which are not publicly available. The County has chosen to conceal the necessary data so that the computation sought by Ohana which would be in the public interest cannot be made.
Both the County and Ohana realize that the proposal will reduce tax payments from those who are protected. The County argues that this reduction will necessarily result in revenue irretrievably lost. That is simply not so. Each year the County sets the property tax and other revenues it will seek to match the amounts it plans to spend so that it will have the legally required balanced budget. In its revenue calculations the amount of property tax revenue from resident homeowners is included. At present this is about 15% of total property tax revenues. The Ohana proposal willsomewhat reduce this amount. The resident homeowner group has in the past had lower taxes due to their favored rates and exemptions, and the County has accommodated to this situation.
It should consider now in the same way how to meet the effect of the Ohana proposal. It can either become more efficient and reduce its spending (a result Ohana would view with favor) or it could seek necessary revenues elsewhere. The tidal wave of increased assessments provides the County with a huge reservoir for additional taxes. Obtaining greater revenue from properties used as vacation rentals would be a popular choice. Numerous other alternatives could be considered.
The venom that the County is spreading is that the revenue lost because of the Ohana proposal would deprive funds from essential services such as the police and generate collective bargaining problems. We cannot prevent these comments from being made, but our citizens should be aware that the County has ample capacity to obtain funds it may need for vital services.
Ohana believes that all significant aspects of the proposed amendment should be fully and fairly disclosed. One such matter is the question when the tax reductions would take effect. The County analysis showed that the Ohana measure would begin to reduce revenues in fiscal year 2004-05 (the current year).We were informed that this conclusion was based on advice from the County Attorney. This determination was of concern as the measure would not be adopted until November 2004 and it provides for the tax adjustments to begin in the next fiscal year . As interpretations of the measure are the responsibility of the County, and the amount involved is significant we thought the public should be informed. We addressed a request to the Mayor to appropriately advise our citizens. No response has been made to our inquiry to date. Thus, to the best of our present knowledge, the County is committed to the position that the amendment if adopted will be effective this year and eligible taxpayers should receive tax reductions or refunds of this year s tax payments.
Regrettably it seems to be the County pattern to either misinform or to fail to inform about the Ohana proposal.
It is the purpose of Ohana Kauai that the proposed Charter amendment should be presented honestly and fairly to the voters for their decision in November. To protect the interests of our citizens we shall seek to correct all known efforts by others to misrepresent the measure.
Walter Lewis is a resident of Princeville and a member of Ohana Kauai
