For years there has been talk of finding a more equitable property tax system. The existing property tax system, while quite convenient for the politicians across the country, has, for several years, caused tremendous inequities leading to some real hardships
For years there has been talk of finding a more equitable property tax system. The existing property tax system, while quite convenient for the politicians across the country, has, for several years, caused tremendous inequities leading to some real hardships on property owners.
I’m not 100 percent sure but I believe that most, if not all, government agencies that impose real property taxes on their citizens use two factors to determine the amount of taxes owed.
1) The assessed value, which is determined (guessed) by an agency employee, who in most cases has little to no appraisal experience; and
2) The tax rates set by the agencies’ governing board.
On Kauai, that’s our seven-member County Council.
Just about every politician, in an attempt to get elected, makes some sort of promise that he/she will not raise taxes. Yet we continue to see our taxes grow year after year.
The one most noticeable is property taxes. Not to mention vehicle registration fees, trash collection fees and TAT. Those are all subjects for future letters. But this letter is about property taxes.
With the always changing factor being the property value, the politicians rest easy that they can’t be blamed for that increase. But we are somehow programmed to believe that we’re so lucky because our property value went up.
As pointed out time and time again, that is only an advantage if you are planning to sell your home or if you are in the investment business (speculator) of buying and selling real property, or “flipping.”
Property taxes pay for services from your county and/or city.
Everyone gets the same services. No matter how much your property is worth. When your property taxes go up, you are not privileged to more or better county services. You just are paying more for the same services. The higher taxes just provide more funding for the same inefficiencies and the same extravagant inappropriate policies. (Unnecessary overtime, misuse of county fuel system, misuse of sick time). It doesn’t pay for our highway maintenance or better roads or more roads. It doesn’t even pay for your trash pickup anymore.
Wouldn’t it make more sense to be taxed based on the size of your property and the size of the improvements on your property? That way, your taxes would only go up if you added some improvements on your property, or if the politicians, who are elected by you, increase the tax rates.
All the information necessary to implement such a system is presently on record at the county.
The categories of properties could remain the same as they are now. Each category of properties would have a unit rate per square foot of land, and a unit rate per square foot of improvements. Except for a few minor adjustments, the same exemptions can also still be applied.
The big difference is that your property taxes would not be affected by the ever changing, unpredictable, sometimes volatile and over exaggerated and inflated property values.
One of the factors of Proposition 13 in California is, when a property is sold, the buyer’s property taxes starts at 1 percent of the selling price and can then be increased by no more than 2 percent per year. This has led to some tremendous inequities.
Speaking from a personal standpoint, I once had a neighbor in California paying about six times the taxes that I was paying. And yet my home was valued higher. Remember, property taxes pay for county and/or city services. We all get the same services.
With the above proposed system, increases to the tax rates, set by the County Council, could also be limited to the Consumer Price Index.
Once this system was implemented, the tedious time-consuming and costly job of reassessing every property on the island every year would no longer be necessary.
We are no longer serviced by a “government by the people.” We are now serviced by a “government to the people.”
We must turn that around now!
Let’s see if we have even one person on the council who will have the nerve to even consider such a change.
•••
Larry Arruda is a resident of Kapaa.
