Harris raising
some property taxes

The new fiscal year also
brings a shuffling of city
agencies to make services
more customer-friendly

By Gordon Y.K. Pang
Star-Bulletin

The new fiscal year starting tomorrow brings changes in Oahu's property tax system and a shuffling of functions among city agencies.

Mayor Jeremy Harris' administration is raising tax rates in a number of classifications to stave off a slide in property tax revenues due to falling assessed values.

Homeowners with older structures may be paying higher bills because they don't have as much value, said Lowell Kalapa of the Tax Foundation of Hawaii.

"For older homes, it would seem they'd get the higher tax bill because the value is in the land," Kalapa said.

Newer homes might see lower taxes since their improvements still make up a larger proportion of their tax bill.

City Budget Director Malcolm Tom said that may be true but doubts the magnitude is that great. The average improved parcel's value is based on three-fourths land and only one-fourth home improvement.

The administration insists the tax system changes will be "revenue neutral to the city" and will not greatly affect the amount of taxes paid by property owners.Rates for apartment, commercial, industrial and unimproved residential properties are going up, while the agricultural and hotel/resort classifications remain the same.

Until now, homeowners have paid taxes based on separate rates for the land and improved portions of their property. This past year, they paid $3.12 per $1,000 of value on their land, $3.92 on improvements.

This coming year, they will pay the same rate for both the residential and improved portions: $3.49 per $1,000 in value.

The administration calculated that the average homeowner will pay $964, or about $14 less than this year's average bill of $978.

Changes are also afoot at the Honolulu Municipal Building as Harris' reorganization plan tries to make city services more customer-friendly.

Some of the changes will happen now while others need to be OK'd by both the newly convened Charter Commission then voters in November's general election.

A "one-stop permitting shop" will be set up on the building's first floor, city Information Director Carol Costa said.

The new Planning and Permitting Department, formerly the Department of Land Utilization, will take over the Diamond Head-makai section of the first floor.

A one-stop "mini-city hall" providing licensing and permitting services not related to land use and building will be on the Diamond Head-mauka section.

Transportation Services, Public Works and Fire departments -- necessary for building and land use approvals -- will be on the Ewa-mauka side.The Wastewater Management Department's customer service area remains on the Ewa-makai end.

Also tomorrow, the Housing Department will be eliminated. Most of its customer functions will go to the Department of Community Services.