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Tuesday, March 9, 1999



CITY & COUNTY

City & Couinty of Honolulu

Property tax
hike may replace
trash fee

Council members say the public opposes paying a garbage-pickup fee

Property tax hits some hard
Mayor's claim raises doubts

By Gordon Y.K. Pang
Star-Bulletin

Tapa

Real property taxes could rise 5 percent if the City Council vetoes Mayor Jeremy Harris' garbage-pickup fee and can't find an alternative.

The Harris plan, unveiled last week, included a new $2.20-a-week fee for the 174,000 users of the city's garbage-hauling service.

But the proposal has drawn opposition from City Council members, some of whom have suggested raising taxes in lieu of the fee. While initially willing to look at garbage fees, some Council members said they have been swayed by telephone calls objecting to the plan.

Harris' $1.02 billion operating budget calls for a "revenue neutral" approach. That would adjust rates to keep most property owners' taxes about the same as the current year, allowing the city to generate the same amount of revenue amid falling assessments.

Budget Director Malcolm Tom, in response to questioning by the Council Budget Committee yesterday, said it would take a 5 percent increase in tax increases in all property classifications to match the $26 million expected to be collected through the rubbish fee.

If the difference in revenue were to be made up only by landowners in the improved residential class, who make up the bulk of those who receive city rubbish pickup, their taxes would need to increase some 15 percent.

Harris, in presenting the budget last Tuesday, said he considers raising property taxes a "legitimate alternative" to the garbage fee, and Tom reiterated the administration's view yesterday.

Some Council members are reluctant to increase property taxes. Council Chairman Mufi Hannemann suggested looking at an across-the-board reduction in the operating budgets of all city agencies.

Tom said that adjusting for uncontrollable items such as debt service and salaries, agencies would need to cut 2 percent of their budgets to come up with $14 million, or 3 percent to net $20 million.

Councilman Jon Yoshimura wants to look at going to once-a-week garbage pickup as a way to reduce costs.

Tom said the savings would be about $2.76 million annually.

Council members yesterday also continued to chide the administration for failing to include some $30 million in raises for city employees in the 2000 budget.

Tom said the Legislature has not yet ratified the collective-bargaining contracts reflecting raises for the United Public Workers and the Hawaii Government Employees Association.

But Hannemann said he thinks both contracts will be ratified, leaving Council members left to find the money.

To pay for the raises, the administration is banking on the Legislature to approve initiatives that would give the city up to $60 million more in annual revenues.

But when pressed by Hannemann, Tom acknowledged that bills yielding the city only an additional $12 million are still alive in this year's session.

"You're sticking a gun to our heads," Hannemann said.


Councilmen: Some hit
harder by property tax plan

Claim that mayor saved
$4 million raises doubts

By Gordon Y.K. Pang
Star-Bulletin

Tapa

Councilman Jon Yoshimura, a Punchbowl condominium owner, says he's seen his property falling in value the last two years.

"My tax bill dropped from $1,000 to $750 last year and it will be even lower next year," he said.

But down the street, condo owners in the Admiral Thomas complex have seen their values leap by some 25 percent, Yoshimura said. With Mayor Jeremy Harris' proposal to raise condo tax rates from $3.97 to $4.49, "they stand to pay hundreds more," he said.

Harris says his budget for next year calls for "revenue neutral" adjustments to real property tax rates.

But while the city's total receipts would be the same, would your tax bill be expense neutral?

Probably not. About half of landowners would pay more, about half would pay less.

How much more or less would depend on a landowner's total assessment, the other variable in the city's property tax equation.

Landowners, according to Finance Director Roy Amemiya, should "take the rate card we gave them, apply it by the rate we're proposing, and see if it's greater or less than we received last year."

Amemiya, despite the Admiral Thomas example, said he believes that there would be few large breaks or increases caused by the adjustment.

Those whose assessments:

bullet Dropped more than the proposed percentage increase in tax rate would see a decrease in taxes. For example, this would apply to a homeowner whose house declined more than 4.6 percent

bullet Dropped about the same amount as the proposed percentage rate increase would get about the same bill as this year. This would happen to a homeowner whose house declined in value 4.6 percent.

bullet Dropped less than the proposed percentage rate increase or went up would look at a hike on their bills. This would happen to those whose homes dropped less than 4.6 percent in value or increased in value.

Some Council members, like Yoshimura, say the proposal would cause a hardship for those landowners with property that has maintained or increased in value over the last two years while tax rates have increased.

Councilman Duke Bainum said the situation would be particularly hard on apartment and condominium owners who have seen their values increase or stay steady two years in a row.

That's because this is the second year in a row Harris is proposing higher rates to offset falling assessments.

So anyone who got hit with steady or increasing values two years straight would get a double-whammy, Bainum said."People can only take so much," he said.

Councilman Andy Mirikitani said apartment and condominium owners don't win either way."It's unfair to those whose assessments have not dropped," he said.


Claim that mayor saved
$4 million raises doubts

By Gordon Y.K. Pang
Star-Bulletin

Tapa

Mayor Jeremy Harris' reorganization of city government saved taxpayers about $4 million, according to Budget Director Malcolm Tom.

Tom's calculations, offered to the City Council's Budget Committee yesterday, drew skepticism from some members because he failed to include details.

The savings calculation also factors in a 1.2 percent adjustment for inflation.

By factoring in an adjustment "for time and inflation," Tom said, next year's budget comes out at $691 million, giving a $4 million savings.

Asked to detail the breakdown of the savings, Tom said it was difficult to do since the money saved was spread throughout city government.

He distributed a list showing savings of $387,000 from the merger of the Planning and Land Utilization departments, $302,000 from the transfer of the Motor Vehicles Division to the Customer Services Department, and $200,000 from the merger of the Budget and Finance departments.

Tom said the largest savings come from the dissolution of the Department of Housing and Community Development, although he could not give a figure. Harris trumpeted his reorganization plan a year ago as a means for the city to save money and become more efficient and responsive.



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