Tuesday, June 8, 1999

City & County of Honolulu

Group opposes
plan to increase
real property taxes

A City Council resolution
raises tax rates for every
category of property

By Pat Omandam


John B. Harmon III doesn't need a reminder that small business is hurting in Hawaii. He sees it every time he looks for a telephone number.

"I know so many people that are gone now," he said. "I go through my Rolodex from three years ago, and a full third of them are out of business. It is just at a critical point."

Harmon, owner of the Other Type, a marketing and advertising graphics company in Kalihi, is a member of the Taxpayer Coalition, a group of Honolulu business and residential property owners who oppose a City Council resolution that raises real property tax rates for every category of property in Honolulu.

The coalition wants the public to testify against the measure at its final hearing tomorrow before the Council. The resolution is part of a package of bills that make up the city's proposed $1.031 billion operating budget.

Instead of raising property tax rates, the coalition wants the Council and city administration to find ways to reduce government and run it more efficiently, said Jay Fidell, coalition spokesman and member of the Building and Managers Association.

"This group, we would much rather see the bell tolling for Resolution 99-71 than for the state of Hawaii," he said. "Clearly, the best choice is to kill this bill."

The coalition's actions come on the heels of a large newspaper ad published yesterday and paid for by Council members John Henry Felix, Donna Kim and Mufi Hannemann.

The three -- ousted from Council power May 17 -- said city government isn't doing enough to cut spending. They want the public to testify in favor of less government spending and no higher taxes.

Here's a breakdown of points made in the ad, and the response by Council leadership and city administration officials:

Bullet Property taxes. The three Council members contend Mayor Jeremy Harris wants to increase property taxes next year, specifically 13 percent for condo and apartment owners; 10 percent for agricultural lands, 9 percent for industrial lands; and 4.5 percent for single-family residences.

Response: There are no increases in property taxes, only an adjustment on how much people pay in property taxes. On average, people will pay the same amount of tax they paid the year before, said Budget Committee Chairwoman Rene Mansho.

Mansho said the average single-family homeowner paid $986 last year and the average apartment/condo owner paid $614 last year. They will pay about the same this year, she said. The adjustment is needed to ensure city services that deal with health and safety -- the Council's priority -- are maintained, she said.

Bullet Fees: The ad states the Council and Harris want to increase the motor vehicle registration fee by 100 percent.

Response: The fee will go up from $10 to $20 under the proposed budget, but it is part of an overall city policy to make people who use specific city services pay more for it, Mansho said. "A lot of people don't own a car," she said. "We're just assessing the users of the service the fee."

Mansho said the Council this summer will study similar fee changes for other city-subsidized services, such as municipal golf and TheBus fares.

Bullet Spending: The three contend the Council's latest budget increases rather than cuts government spending. For example, it adds $8.5 million in the city operating budget; increases the city construction budget by a net $15 million; and expands the city work force by 24 positions.

Response: Mansho explained the state Legislature this year funded $39 million in retroactive union pay raises and gave it to the counties to pay its public workers.

But rather than increasing the city operating budget by $39 million to accommodate the pay raise, Mansho said the Council leadership and the mayor agreed to defer some projects so that the operating budget increased only by $8.5 million.

City Director Malcolm Tom said the proposed capital improvement budget actually reduces spending from $352.9 million last year to $267.6 million this year, or $85.3 million less.

Mansho explained the $15 million net increase stated in the ad is due to a Council change in spending policy on the purchase of equipment.

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