Homeowners caught in Catch-22 of exemptions
I READ in the Dec. 28 Star-Bulletin of Mayor Mufi Hannemann's intention to ask the Honolulu City Council for a tax break for homeowners who live in the properties they own. I could not agree more about the need to have real property tax relief, especially for older homeowners like me and my wife, who are on fixed incomes.
As I read through the article, I took particular exception to the statement by City Councilman Todd Apo, who, referring to the Council action last year doubling the homeowners' tax exemption, said, "Either way, you get the same result."
When I heard the City Council would increase the base homeowner's exemption from $40,000 to $80,000, I was cautiously optimistic that we might actually get some tax relief. Sadly, it was not to be, as I learned when I received my 2007 Real Property Tax Assessment on Dec. 15.
BEFORE THE City Council's idea of real property tax relief took effect, the system in place gave older homeowners graduated exemptions in $20,000 increments, starting at age 55 ($60,000 exemption), again at age 60 ($80,000 exemption), age 65 ($100,000 exemption) and age 70 ($120,000 exemption).
However, the City Council's new formula, while raising the basic exemption from $40,000 to $80,000, also eliminated the graduated exemptions for homeowners age 55 through 64, in essence penalizing those of us on fixed incomes by not allowing any additional exemptions until age 65. Take my case as an illustration: While my basic exemption went from $40,000 to $80,000, I lost the $20,000 exemption that I gained at age 55, and another $20,000 that I gained this year, when I reached age 60, which equals zero tax relief. In addition, I will not qualify for any more exemptions for another five years at age 65, unless I become disabled.
ALSO, the city's Real Property Tax Assessment Division increased the assessment on my residence in Kailua, with a corresponding increase in my property taxes, as it has done every year since implementing the real estate sales-based computerized assessment system.
Again, I could not disagree more with Apo's statement: "Either way, the result is the same." The result for homeowners like my wife and me is not the same. We lost $40,000 in exemptions; will not get any more exemptions for five years, unless I become disabled; and have to pay higher property taxes again.
It would have been more equitable to increase the basic exemption from $40,000 to $80,000 and leave the other graduated increments in place; however, that did not happen. The City Council gives with one hand to some homeowners, and takes away with the other hand from those homeowners who can least afford it -- homeowners on fixed incomes. There is something seriously wrong with this logic.
THE END result is that the city continues to rake in more money from property taxes, and is still not providing adequate services to its residents.
It makes more than one person think that perhaps Honolulu needs its own version of California's Proposition 13, so its homeowners can get proper tax relief.
Robert L. Silva, a retired Honolulu police officer, lives in Kailua.