Plan cuts Maui property taxes
Mayor Arakawa's tax-break proposal offsets homeowners' rising land values
WAILUKU » Maui residents faced an average 25 percent increase in real property taxes in fiscal 2007 because of rising land values.
But Mayor Alan Arakawa yesterday proposed lowering property tax rates to offset the higher valuations so homeowners would pay about the same as they did the year before.
The mayor wants to reduce the tax rate to $2.14 cents from $3.50 per $1,000 of assessed valuation, resulting in a decrease in taxes of $12.5 million to homeowners in Maui County.
Arakawa also has proposed giving tax breaks to property owners who rent to long-term tenants and also wants to reduce the maximum amount taxable to qualified property owners living on small incomes.
The mayor previously announced a proposal to exempt active duty military personnel from paying real property taxes, while they are defending their country.
Even with the Arakawa's proposed tax breaks, the county is expected to see its revenues from property taxes grow to $200 million from $160 million, county officials estimate.
The county expects a 32.1 percent increase in overall real property tax values and a 7 percent increase in the transient accommodation tax income, Arakawa said.
A large share of the increase in county property revenues is expected to come from a double-digit jump in assessments in most land uses.
County officials anticipate a 36 percent assessment increase for hotel/resort, 53 percent for timeshare units, 31 percent for agricultural, 31 percent for improved residential and 25 percent for homeowners.
The assessments are based on preliminary estimates from the county for fiscal 2007.
Arakawa has proposed a budget that would spend $133 million on capital improvements, compared to $82.2 million in fiscal 2006.
In his $542 million budget for fiscal 2007, he said the county should use some of the additional money to catch up on waste-water maintenance projects and other capital improvements.
"Making these improvements is the responsible thing to do," Arakawa said.
The proposed projects include $10.5 million for a new Kaunakakai Fire Station and $25.9 million in waste-water system facilities, and $38.4 for drainage and road improvements.
Councilmembers Dain Kane and Charmaine Tavares called the mayor's budget "ambitious."
Kane said he will look at how much work can be done in a "tight" job market where there are a limited number of construction workers.
"Where are you going to get people to do the work?" Kane asked.
Councilmember Jo Anne Johnson said she was "really pleased" that Arakawa was focusing on repairing roads and other capital improvements.
She said additional sewage facilities are needed in west Maui for more housing.
"You can't build additional housing if you don't have adequate sewage services," she said.
Arakawa has asked for a 14.4 percent increase in his operating budget or an additional $46 million -- about $10 million for union salary increases and more than $11 million for power costs.
He has asked for an additional $2 million to operate the county bus system on Maui.