Property tax measures advance
A City Council panel OKs several bills to be weighed Feb. 15
A one-time tax credit, help for low-income homeowners, beefed-up exemptions and a new way to set property tax rates are among proposals moving forward in the City Council's quest to cut climbing property taxes.
"We're trying to find the relief for as many people as possible, as soon as possible," Budget Chairwoman Ann Kobayashi said after yesterday's Budget Committee meeting. "We need to start focusing and honing in on what will work best for our property owners."
Among the proposals not moving are those that give a tax break based on the length of time homeowners live in their house and also cap taxes similar to California's Proposition 13.
All the bills will be heard on Feb. 15.
The committee deferred taking action on Bill 1 (2005), which would double the exemption taken off the value of a homeowner's house to $80,000, but Kobayashi said that was only because that bill, which was introduced last year, was further along in the approval process. She will keep it in committee until the other bills catch up.
"We're moving everything cautiously, and yet there's an urgency because we have to pass everything so that it can be effective (this year)," she said.
Kobayashi said the Council is still waiting for critical information, including how much these proposals will cost.
Kobayashi likes Bill 12, which allows tax rates to be adjusted automatically to offset the rise and fall of assessments but is subject to the mayor's judgment on whether the city needs more money. She said that is because it takes the current extreme highs and lows of assessments based on market values and is adjusted annually so that taxes would be about the same.
"You'll know that you'll pretty much pay the same amount of tax adjusted for an increase in fixed costs of the city," Kobayashi said.
If there are any further costs, then "we can try to trim our budget elsewhere," she said.
Kobayashi said that if Bill 12 moves forward -- she is hoping to pass it before the mayor submits his budget in March -- and becomes effective this year, there might not be a need for some of the other measures, like the one-time tax credit or a homeowner's classification.
"Credits and all of that are good for now," she said, "but we're looking for something that's a long-term fix, which will give security to our property owners so that they won't worry each year, 'How much do we have to pay for property taxes?'"
But some members raised concerns about what is moving forward.
Councilwoman Barbara Marshall, who introduced a resolution urging the mayor to lower the tax rate, said the Council and mayor can already do what is in Bill 12 in regards to when the rate can be changed.
"We have the ability every single year to raise or lower the property tax rate. The fact that we find it difficult to do that is neither here nor there," she said. "We have the ability right now to lower the property tax rate for next year. That's the way we can restore people's money right now. No tax credits, no changing with exemption, no nothing."
PROPOSALS UNDER CONSIDERATION
The Budget Committee approved the following property tax proposals:
» Bill 80 (2005): Legislation approved last year that caps taxes at 4 percent of household income of $50,000 or less would begin this year instead of next year. Kobayashi said the committee is backing off increasing the income limit to $75,000 at this stage.
» Bill 82 (2005): A one-time tax credit that has yet to be determined.
» Bill 3 (2006): Exemptions for properties used as low-income rentals.
» Bill 81 (2005): Creating a homeowner's classification, which would receive a lower tax rate than other residential properties. Mayor Mufi Hannemann has pitched such a proposal.
» Bill 12 (2006): Tax rates would be initially adjusted automatically to offset the rise and fall of assessments to stabilize tax bills, but the mayor could propose an increase in the rate to pay for a rise in fixed costs such as salaries, debt and health benefits.