Monday, May 17, 1999

Kauai property
taxes going up

The idea is to offset the
loss of the transient
accommodations tax

By Anthony Sommer


LIHUE -- Residential property owners will see their taxes go up about 11 percent next year, while owners of apartments, stores, resorts and industrial property will face a 6 percent increase, under a plan almost certain to be approved by the Kauai County Council.

The Council's Finance Committee -- which includes all seven Council members -- voted unanimously last week to approve Mayor Maryanne Kusaka's request for an increase of 50 cents per $1,000 of assessed value on all classes of property.

The Council will formally ratify its decision May 26. Since Kusaka proposed the increase, there is little doubt she will sign the measure once it is approved.

Both the Kusaka administration and the Council have labeled the plan "equitable." A similar across-the-board increase of 31 cents on all tax rates went into effect this year.

The proposed 50-cent boost will result in two identical properties -- one residential and one income-producing -- having identical dollar increases in their tax bills. But as a percentage increase, residential property owners will be hit almost twice as hard.

For example, according to the county, the annual property taxes on an owner-occupied house with the structure valued at $150,000 and the land at $50,000 will go from $900 to $1,000.

That's an increase of $100, and a percentage increase of 11.1 percent.

If the same house is used as a rental, store or repair shop, taxes will go from $1,600 to $1,700.

That's also an increase of $100, but the percentage increase is only 6.25 percent.

Property taxes at the new rates are expected to yield $34.4 million for the county next year, a 10.6 percent increase over the $31.1 million that will be collected this year.

Council Chairman Ron Kouchi said the additional money is needed to offset the loss of income from the transient accommodations tax, which the state took away last year.

He said the mayor and the Council have decided they cannot continue to keep dipping into construction funds to subsidize general fund programs. Repair of county roads in particular has been neglected, he said.

Kouchi said there was an option to hold the line on residential property taxes and instead charge homeowners a fee to use the county landfill. The landfill has been operating in the red for years.

The trade-off was increasing residential property taxes -- which boosts deductions on state and federal personal income taxes -- and continuing to allow homeowners to use the landfill for free, he said. Part of the revenue from the increased property taxes will go toward supporting the landfill.

Kusaka frequently calls herself a "pro-business mayor," and received strong financial support from Kauai's business community in last year's election.

County Assessor Steve Hunt, a Kusaka appointee, said if there is a break for business in the tax increases, it's justified.

"If you look at all the empty storefronts along Rice Street (in downtown Lihue), you can see business can't stand much of a tax increase," Hunt said.

"If we ever find a way out of our economic problems, it will be because the commercial sector is leading us."

E-mail to City Desk

Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
[Stylebook] [Feedback]

© 1999 Honolulu Star-Bulletin