Why does Kaua‘i County have the lowest property tax rates for hotels and resorts in the entire state of Hawai‘i?
What public purpose does it serve to charge the Hyatts, the Marriotts, the Hiltons, and so many other off-shore foreign corporations less money than any other county in Hawai‘i?
As of the current fiscal year, July 1, 2021 to June 30, 2022, the hotel and resort tax rate (per $1,000 of assessed valuation) by county, is as follows: Honolulu $13.90, Maui $11.75, Hawai‘i Island $11.55, and Kauai $10.85.
Kauai charges $3.05 (per $1,000 of value) less than Honolulu.
The taxable value of hotel and resort properties on Kaua‘i is $2,667,497,850.
Stay with me for a moment, please, while I do the math.
Increasing Kaua‘i’s hotel and resort rate to equal Honolulu’s rate would bring in over $8 million every year that could be allocated for affordable housing, homeless shelters, youth programs, drug treatment centers and more.
$8 million more with just a stroke of a pen. All paid for by off-shore corporations that are already paying this rate for their properties located on other islands.
Wait. It gets better.
Let’s not forget transient vacation rentals (TVRs), which are essentially individual homes operated as mini hotels but located in residential areas.
What if Kaua‘i did what Maui does and charged TVRs the same tax rate, or even slightly more, than hotels and resorts?
The total taxable value of TVRs on Kaua‘i is $3,830,495,450 (yes, that’s more than hotels and resorts).
Increasing the Kaua‘i TVR rate to that of the O‘ahu hotel/resort rate would generate an additional $15,513,505 annually.
Let me spell it out.
If the Kaua‘i County Council had the courage to increase property taxes on hotels, resorts and TVRs to the same level now charged by the City &County of Honolulu, our community would benefit to the tune of over $23 million annually.
That’s $23 million per year above and beyond what is now coming in and used to run the county.
That’s $23 million per year for affordable housing, homeless shelters, youth programs, drug treatment centers and more.
That’s $23 million per year that could be used for much-needed infrastructure improvements — sewer, water, roads. Did I say potholes? Think about how many potholes $23 million would fill 😉
And remember, that money would 100% be paid for by people on vacation, who don’t live here, but yet who benefit from and utilize our collective public resources — people who are already paying that rate when they island hop.
What’s there not to like?
Unfortunately, when a very modest proposal to increase TVR property tax rates by only $1 and estimated to raise $4.5 million was introduced last week, it was shot down in a 4 to 3 vote.
The three reasons given by the four “no” votes were essentially: We don’t need the money right now. How can we be sure the money will be spent on affordable housing? What about the impact on local residents who also operate TVRs?
Our county desperately needs additional funding. Affordable housing, while being our top priority, is only one of many critical areas in need of support. We have a languishing youth drug treatment facility, homeless shelters at capacity, have thousands of cesspools where we need modern sewer systems, and our only landfill is perpetually at capacity.
These are urgent needs, not simply wants.
As to the fortunate local residents who own a second home they operate as a TVR? They should just pass the costs on to the tourists who are renting the place, just as every other hotel does.
While good people can look at the same information and come to different conclusions, for the life of me I cannot understand the resistance by those four councilmembers.
Honolulu does not have fewer tourists visiting because taxes are too high. Ditto for Maui. Raising our property tax rates to match the Honolulu rate will not have one iota’s impact on the tourism economy here on Kaua‘i.
Kaua‘i could have $23 million more to spend each and every year, tourists and hotels would pay the price, and local residents would benefit.
Tell me again what’s there not to like?
Tell me again why you voted no for a basic $1 increase that would have yielded $4.5 million during its first year specifically intended for affordable housing and in subsequent years could be allocated toward whatever needs the council deemed a priority?
To be absolutely clear, the council, not the mayor, has the legal responsibility and authority to establish the county budget. The mayor will submit to the council the administration’s preferred budget, but the council has final say and can amend or approve as they see fit.
Here is Kaua‘i Charter Section 3.10. Annual Budget and Capital Program. The council shall enact an annual budget ordinance, which shall include both the operational and capital expenditures for the fiscal year and the method of financing same. The council shall provide sufficient revenues to assure a balanced budget.
Sources for tax info:
w https://kauai.granicus.com/MetaViewer.php?meta_id=139956
w https://www.realpropertyhonolulu.com/media/1789/ratesfy22.pdf
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Gary Hooser is the former vice-chair of the Democratic Party of Hawai‘i, and served eight years in the state Senate, where he was majority leader. He also served for eight years on the Kaua‘i County Council, and was the former director of the state Office of Environmental Quality Control. He serves in a volunteer capacity as board president of the Hawai‘i Alliance for Progressive Action and is executive director of the Pono Hawai‘i Initiative.
Gary-
What you are missing is Kauai / Hawaii is already charging 19% GET & TAT tax to visit Kauai in a TVR. Just last year a 4% increase ear marked for the municipality of Kauai was dropped in making Kauai the most taxed island to visit and the most expensive place to visit in a TVR in the USA.
Let me repeat that – Kauai receives more tax revenues from TVR than any other place in the United States including Maui, Hawaii and Oahu. The increase taxes last year make it much more expensive to stay in a TVR than a hotel and generates more income to Kauai. Nearly 30% of every dollar collected goes to either property taxes or GE/TAT.
Your destructive propaganda and lack of facts is not serving the community. I constantly have heard from you for the last 25 years those bad TVR and that they do not contribute.
Facts- As far as property taxes, several years ago the County increased property taxes 5 times more for a single-family home / TVR. We are not hotels and offer wages 3 x more for help, educating guest on many topics including respect for the land and Hawaiian culture.
Funds from increased property taxes are already supposed to be ear marked for community projects, emergency funds and drug rehab. Perhaps you can do an accounting of this first before you pop off.
Since you helped in 2008 to try and eliminate and increase taxes, I have never heard one politician take the time to review the history of TVR on Kauai, how much tax was collected from TVR, and how it was spent.
You’re nothing but a political hack / consultant who got busted for not paying your GET and TAT taxes years ago. You lobby for Geroge Soros type candidates that are more focused on dividing a community and offer no long-term solutions.
You represent the same old politics and bring nothing new to the table except dividing a community. This is now how you make a living is to divide the community with false information. How many candidates do you represent this cycle?
Kauai is now recovering from the Covid shut down of 2020-2021, 2018-2019 flood on the north shore. Kauai has continued to collect my property taxes from my TVR for nearly 4 years with only 12-16 months of revenues. We did not get government handouts to run our business like the Kauai municipality did, received no grants, property tax relief or a small business loan during Covid or the 2018-2019 Great Flood and now you want to propagate the only thing you know how to do. The reality is we lost over $500,000 in the last 4 years.
Gary if you really want to do good for the community meet with all 15 of the largest landowners to broker a 25–30-year low-cost housing plan. Work with schools to help keep kids off drugs. There is one way for drugs to get into Kauai (air) How about Kauai invest into Dog sniffing dogs, buy one-way tickets back to the mainland for homeless that don’t belong, enforce the laws regarding public sleeping, build a homeless shelter, and stop with the entitlement position. In the last 25 years I have not seen you once on a committee to solve these problems, yet your solutions are a repeat that has no merit or facts to sustain why Kaui has wasted the increased property taxes from TVR sine 2008.
Your rhetoric for the last 25 years has not solved any of the issues you claimed to care about. How about you look in the mirror and ask yourself what you are contributing to the community and how you can work to solve problems not divide a community.
Luke and Mason, I hope your reading this or if someone can give this to them as well as uniformed politician that spew hate will be the destruction of a healthy community.
Gary, your political instincts are not close to being on target as you were one of the loudest critics of Trump and gave us Biden, which brough us a 100% increase in gas, food, travel, has ruined our economy and is leading us in a depression.
Kauai no longer needs to hear from you!
The sure sign of mental illness that liberals can exhibit at this time of economic policy failure, raise taxes. Are you paying too much for basics? If so, it must be time to raise taxes! That’s the mental illness of liberalism. All they know is that your money is theirs, not yours! Time to vote them all out! Does Biden and the Democrats care how much you are paying for gas, groceries, energy, or anything else? NO!!! They want your money at any cost to you! Do the right thing at election time, vote them out!
Aloha, I am a frequent guest of your beautiful island, I stay at the MARRIOTT in Lihue, and have learned so much about your island by being a daily reader of this local paper. I have done my best to become a better guest, and am willing to pay whatever it takes through methods available to tax the industries that benefit from my being your guest. I have learned more about the politics, and your economy and the effects of tourism on the well being of your economy and the destruction the natural beauty caused by over tourism. The flood, the effects of global warming are an indicator of the need for the tourism industry on Kauai, to pay their fair share so that the quality of life, a living wage, can provide for the necessary means to raise a family, without working MANY jobs. MAHALO, Drew
That’s right, Gary. Stick it to the tourists!
-Instead of tax and spend, how about we manage the budget??
I have learned a great deal since 2011 in dealing with your State’s taxing authority and the politics of Hawaii in general. I would like to offer some factual statistics of what being an out of state home owner that also vacation rents their property brings to the State of Hawaii and what expenses they are actually subject to.
Since 2011 our rentals have entertained 524 guests. According to your own State Tourism web site, the average cost for a couple to visit Hawaii is $3750 per week. Averaging each stay at 7 days. Those people have brought to the state’s economy $1,960,000.00 in Taxes, airfare, rental cars, groceries, entertainment, tours, sightseeing and restaurants. Also, owning a residence in your state requires upkeep and maintenance. None of this money was generated by anything you people do.
Since 2011 we have pumped $343,326.00 into the states economy by way of GET & Tat taxes paid to the state, totally ignorant property taxes, electric bills, creating jobs for locals in cleaning, maintenance and handyman services, buying furniture & furnishings, groceries, food, tours and visiting restaurants. Totaling up these expenses we alone have injected $2,303.326.00 into the state’s economy. Where’d that money go? Your roads are falling apart, your parks are not maintained and are junk.
Your efforts to continually target non state resident property owners for exorbitant property taxes and tourists for more money is unfair to both the property owners that are bringing operational dollars to this state as well as the people visiting Hawaii, while the local residents enjoy the same activities with lower taxes and NO park user fees who use the same facilities but only off the backs of others that pay their way for them. Locals do not own those islands. How would you like it if Las Vegas charged Hawaii residents 8% just for coming there? It’s pretty much the same thing as you are putting a strain on their infrastructure also which is part of your ridiculous fee justification.
Is the aloha spirit truly a way of life in Hawaii or is it is simply a marketing slogan to get more people to come there, spend their money and be taxed and fee’d to the limit as well as being verbally and at times physically assaulted by some of the local residents? That also is a fact of what is occurring there. Is this Aloha spirit? Apparently so!
Your state cannot sustain its existence without the mainland or worldwide tourism. You import over 95% of your food and durable goods to your state because you failed to create a self-sustaining economy or job sector. Your politicians over the years created this scenario by selling your state to tourism. Their vision was, sit back, do absolutely nothing and collect money from everyone else by prostituting the state. However, they were out to lunch when it was noted, “You don’t get tourism money without actual tourists”, and you do not get the benefit of being a state in America w/o free travel. The result? A Lazy population that demands they get everything for free while others pay their way, are continually fee’d and taxed past comprehension for their benefit.
Hawaii in my opinion is one of the most beautiful places on earth with some very uneducated and corrupt individuals living there and running it. It is destined to failure because these atrocities have gone on far too long and there are no more options. You will continue to raise tourism costs, taxes and fees because the gross population is under educated and just plain lazy while the tax monster mismanages the funds collected but can never make the local population pay their fair share. They can’t. And they don’t!
So when you politicians start pointing fingers as you fail, remember one finger points away but the other four are pointing right back at you which is where the entire blame lies! You’re tourism first policy is only sustaining the lazy attitude amongst your state population and perpetuating the “I want it for free so let’s charge the howlies” attitude. YOU HAVE AND CONTINUE TO FAIL YOUR STATE! My point? An additional 3% TAT tax, additional park parking fees at parks but only for tourists, and now conversations in regards to an additional 1% TAT tax so tourists can provide affordable housing for the free loading locals? This attitude is the sole reason locals are demanding more free things. Hawaii shows aloha and is not racists? Lecturing the tourists to show aloha when coming there? You really should practice what you preach!
The only thing you are destined to do is raise the cost of vacationers coming to Hawaii in which they will eventually go elsewhere. When that happens (and it will) Mr. Luke Evslin you can explain how and why Hawaii residents have lost their jobs, houses, their livelihood because YOU had this idiotic idea that tourist should pay for locals housing! How absurd!!!
Great points Mike!
You would think the 2 years shut down without tourism would still be fresh in everyone’s mind. How many businesses still liter Kuhio Hwy island wide, shut down, never to return.
Gary Hooser and his backed candidates (Luke, Mason, Fern) want to kill tourism, as their rhetoric and message of hate towards tourists is being well read across the United States & Canada right here in the Garden Isle and Facebook every day.
So many jobs still available yet many of the houseless refuse to work. Without the Federal gov bailout / financial assistance during the blockade on tourism, Kauai middle- and low-income families would have been devasted more than it already is.
The reality is the population of Kauai has doubled or tripled since the last time real property taxes %’s were increased on many homes.
No longer can any municipality sustain its services if the growth of its population has increased over 100% since the 80’s without raising property taxes a .25% to help its own, local families, low-cost housing, drug rehab centers.
Kauai can’t continue to be a refugee as it was in the 60-70’s for those looking to escape the realities of life. High inflation, rent increase, higher gas prices, food, are not keeping up with minimum wages that Gary Hooser what to provide more jobs for!
Many of these issues are not from lack of dollars collected from tourism, it’s the lack of Kauai to acknowledge it has a problem with past leaders, that bring no new solutions to solve very difficult problems that every municipality across the US is facing.