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Harris lauded City Council members and tax experts praised Mayor Jeremy Harris for his plan to reduce the property tax rate for apartment/condominium dwellers.
for plan to drop
condo tax rates
The goal is for apartment and
single-family home tax rates
to equalize in 2004By Gordon Y.K. Pang
Star-Bulletin"It's something both the mayor and I promised apartment and condominium owners," said Council Chairman Jon Yoshimura, who represents a Punchbowl-Kalihi district with a lot of multi-family properties.
"As a condo owner and the representative of thousands of condo dwellers, I think that we should have the same tax rate" as owners of houses, he said.
The reduced rate for condo owners was the highlight of the $1.1 billion budget Harris submitted to the City Council yesterday.
He also submitted a $498 million capital improvements package, the largest in his six years as mayor.
Currently, apartment/condo owners pay $4.49 per $1,000 of assessed value. Single-family owners pay $3.65.
The Harris plan would reduce apartment/condo rates by 28 cents next year, and then 28 cents the year after that until both rates are the same in fiscal 2004.
Single-family and apartment/condominium rates first split in 1991.
The owner of a condo assessed at $175,000 would pay $49 less annually as a result of the 28-cent decrease. The cost to the city will be about $3.8 million.
"This will be good for condo owners, and the basis for the reduction is fairness," said Councilman Romy Cachola, who represents the Kalihi-Halawa district, which also has a high concentration of apartments and condominiums.
Leeward Councilman John DeSoto said he thinks reducing the discrepancy in rates is good, but feels the city should also address problems facing agricultural property owners who feel they pay too much in sewage fees.
Lowell Kalapa, executive director for the Tax Foundation of Hawaii, said he applauds the concept of going back to one rate for all residential properties.
Kalapa said the city should also look at bringing nonresidential properties closer to residential rates.
"It affects all of us as consumers because the tax is passed on to those who buy," he said.
Jane Sugimura, president of the Hawaii Council of Associations of Apartment Owners, said her organization has lobbied for equal rates for years. She said her only regret is that the equity isn't achieved in the first year.
Nick Ordway, University of Hawaii real estate professor, said it makes sense to make the two rates more equitable because apartment and condominium dwellers "are paying higher taxes than single-family residents and appear to get fewer services."
Jay Fidell, a director of the Building Owners and Managers Association, said a commission should be established to review all tax rates.
Harris and his staff had been warning for months that taxes would need to be raised to meet some $60 million in costs attributed to negotiated pay raises for city workers and increased health and retirement system contributions.
But the city will be able to achieve $25 million in savings by restructuring its debts, the mayor said.
The city also will be receiving $23 million in public service company taxes, $41 million in reimbursements from the now self-supporting sewer fund, and $4.1 million more than last year in the city's share of hotel room taxes.
The Harris budget does not include a City Council proposal to increase bus fares in order to raise $5 million more annually to support TheBus and Handi-Van operations.
Under questioning by reporters, however, Harris said he would not veto such a plan. He said while he is a little concerned about lost ridership, he believes a bus fare increase is justified.
No fee increases or reductions in service are planned.
The budget also includes funding for 23 new police positions, 35 new parks groundskeeper positions, 10 more lifeguard positions and expanded hours for operation of the city's traffic-control center.
Councilman Duke Bainum, a former chairman of the Budget Committee, called Harris' overall submittal "a smart budget," unlike the "smoke and mirrors" of some previous packages.
City & County of Honolulu
