Property values
drop; so will revenues

Mayor Harris will 'try to
do everything not to have to
raise property tax rates'

By Pat Omandam

Star-Bulletin

Oahu property values for next year will drop by 3.59 percent, meaning the city will face declining tax revenues for the sixth year in a row, city officials said.

The $3 billion drop in values translates into $16 million to $17 million less in tax revenues to balance the city budget -- unless property taxes are raised.

But that's an option Mayor Jeremy Harris hopes to avoid.

"We're going to try to do everything we can not to have to raise property tax rates," he said yesterday.

Harris said the drop means the real property tax revenue base for the city will have fallen a total of $20 billion since fiscal year 1994. As a result, the city is basically operating with $57 million less in property taxes than it did five years ago.

Between 1994-1999, the city reduced its work force by 7 percent, but that savings has been negated as the size of the police and fire departments rose by 8 percent, he said.

The city mailed out more than 250,000 assessment notice cards yesterday. Finance Director Roy K. Amemiya said values dropped for all classes of property on Oahu.

Overall, total gross property values fell to $83.5 billion from $86.5 billion last year. By classification, Amemiya said residential property values dropped 2.5 percent, from $45.1 billion last year to $43.9 billion. Apartment/condominium values fell 4.6 percent, from $17.7 billion to $16.9 billion.

Other declines are:

13.1 percent for unimproved property (vacant land).

4.2 percent for commercial property.

7.6 percent for industrial property.

0.3 percent for hotel property.

12.5 percent for agricultural property.

Values for conservation/preservation property rose by 1.7 percent. Amemiya attributed the increase to the reclassification of the Luana Hills golf course from agricultural land to conservation land.

When shown by tax assessment zone, Wahiawa showed a 12.4 percent drop in gross property values for all classifications, followed by Nanakuli-Makua with a 11.3 percent decrease.

Overall, Honolulu property values fell by 5.2 percent. The lowest decline was in East Honolulu, where values fell just 0.5 percent.

Harris acknowledged he thought the decline in property values would "bottom out" last or this year.

Still, he remains optimistic about next year because of increased sales in the real estate market which could lead to higher demand and higher prices for properties, he said.

Any appeals to property tax assessments must be received in person or postmarked by Jan. 18.