Garcia warns colleagues of tax cut cost


POSTED: Thursday, October 08, 2009

As City Council members continued exploring proposals aimed at relieving the property tax burden on homeowners, the chairman of the Council's Budget Committee warned colleagues to be mindful of the cost that could be attached to such measures.

“;I caution the members, in the rush to try to come up with tax relief ... be careful,”; Councilman Nestor Garcia told members of the Budget Committee during a hearing yesterday.

“;We have had no real discussion on expenses. ... If we start giving away, in the interest of tax relief, when I propose cuts in services and programs, I want support.”;

Garcia referred to the Council's crafting of the budget for the current fiscal year and his attempt to offset proposed tax cuts through steep cuts in services — including the deletion of funds earmarked for the city's islandwide curbside recycling program.

That cut was opposed by other members and the recycling funding ultimately was restored, but Garcia said if Council members seek significant tax cuts, the money will have to be made up somewhere.

“;When I take the ax to programs and services, I expect that support,”; Garcia said.

Councilwoman Ann Kobayashi, who sits on the Budget Committee, said Garcia's warning was appropriate, considering the budget shortfall facing the city next year. Mayor Mufi Hannemann's administration early on had pegged the deficit near $176 million.

“;Where are we going to make up that (deficit)?”; Kobayashi said. “;We can do it by raising property tax or we can look at the other side — the expense side — and make cuts.

“;So he's trying to achieve that balance.”;

Garcia's warning came during debate on several tax proposals, including a measure supported by the Hannemann administration to create a separate “;homeowner”; classification for real property tax assessments.

The measure is an attempt to separate the tax rate for owner-occupants, giving the city the ability to adjust rates for investors, speculators or other property owners who do not live in their homes.

The proposal, Bill 51, may get a cool reception when it goes before the Council for final vote Oct. 27.

“;My sense is that the Council still is uneasy, to put it mildly,”; Garcia said.

Opponents, including Chairman Todd Apo, say the city already can ease taxes on homeowners by adjusting the $80,000 property tax exemption that can be claimed by homeowners.