Trio of bills eases property tax burden
Some say the City Council's measures do not adequately address rising levies
After listening to weeks of public outcry, the City Council passed a package of three bills aimed at softening the blow of rising property taxes.
But some questioned yesterday whether these measures will be enough.
"Something has to be done, but we need to be much more aggressive," said Mike Abe, chairman of Democrats for Property Tax Fairness, who along with others called for a freeze on taxes.
The Council approved Bill 1, which would double the exemption on valuations for owner-occupied homes to $80,000 and includes a higher exemption of $120,000 for homeowners age 65 and older.
The second bill, Bill 80, would move up to this year the start of legislation that caps taxes at 4 percent of household income of $50,000 or less.
The third measure, Bill 12, is designed to stabilize tax bills by setting the tax rate to accommodate the rise and fall of assessments while still bringing in enough revenues to account for the city's costs.
"This gives us an opportunity to right-size government so we don't overburden our residents with needless appropriations," Budget Chairwoman Ann Kobayashi said. "So this way, we figure out how much do we need, this is how much we're going to collect."
But some do not see Bill 12 doing much more than what the Council and mayor currently do when the tax rates are set.
"Bill 12 is not a perfect bill. It doesn't automatically lower the tax rate," said Councilwoman Barbara Marshall, who voted for the bill. "It certainly sends a strong message from this Council to the administration that we expect expenses to be held in check. It does not guarantee anything."
Councilman Gary Okino said he was pulling his support for Bill 12 because he is skeptical about what it will do.
"I think it will not give us what we've been told it's going to give us, and I think time will prove my point," he said.
Mayor Mufi Hannemann had proposed a one-time $40 million tax cut, among other proposals, but none of those ideas made it out of committee.
Prior to yesterday's vote, Hannemann said he would wait to see what comes to him before deciding whether to veto any of the tax bills.
Hannemann said if Bill 12 helps homeowners who occupy their homes and gives the mayor enough flexibility, then he might be OK with it.
"So I want to see the final version," he said.
Hannemann also said he still hopes that the Council will agree with him to put money aside in a rainy-day fund, which might not be possible under Bill 12.
Hannemann is expected to submit his budget to the Council next week.
Budget Director Mary Pat Waterhouse said the budget that will be submitted to the Council will likely keep the same residential tax rate of $3.75 per $1,000 valuation based on what is currently on the books.
But Kobayashi said she believes once Bill 12 becomes law, the administration will likely be looking at a lower tax rate.
"If they propose the same rate, I'm sure the Council will look at cuts we can make so the rate can be lower," Kobayashi said. "If he does that, we're certainly going to adjust so that we'll only collect the amount needed."
Waterhouse said the administration will be able to live with the bill, which led Marshall to ask, "So that's why you could live with it, because (the mayor) can set any rate he wants to set, as can we?"
Kobayashi said she is not sure if the measures will quell public concerns about rising taxes. "Probably not. It's a burden to pay property tax. We all have to pay it."
HIGHLIGHTS OF THE PROPERTY TAX BILLS
The City Council passed bills yesterday intended to offset increases in real property taxes due to rising values:
» Bill 1 would double the exemption on valuations for owner-occupied homes to $80,000 and includes a higher exemption of $120,000 for homeowners age 65 and older.
» Bill 80 would move up to this year the start of legislation that caps taxes at 4 percent of household income of $50,000 or less.
» Bill 12 would set the tax rate to accommodate the rise and fall of assessments while still bringing in enough revenues to account for the city's costs.