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Tuesday, January 18, 2000

By Ken Sakamoto, Star-Bulletin
Mayor Jeremy Harris briefs the House Finance Committee today.

Mayors renew
bid for tax break
for counties, share
of traffic fines

County officials asked
legislators today for an excise tax
exemption and more control
over revenues they generate

By Gordon Y.K. Pang


Honolulu Mayor Jeremy Harris, citing a continuing decline in revenues, is renewing his call to exempt the counties from paying general excise taxes and to get a share of traffic fines and forfeitures.

Harris and the three neighbor island mayors made presentations today to the money committees of the state Legislature.

Oahuwide property values assessments fell $3.2 billion the past year, translating into a projected $16 million loss in property tax revenues to the city in the coming fiscal year, the mayor said. Property taxes are the chief source of revenue for the city's $1 billion annual operating budget.

Meanwhile, a 1998 legislative change to the distribution formula of hotel room taxes has sliced an additional $10 million in revenues, a reduction of about 23 percent, from the city budget over two years, Harris said.

In the past, Harris and other mayors have called for both the excise tax exemption and shares of traffic fines and forfeitures, without much success.

This year, he said, the city has tightened its expenses, resulting in a current year budget that is $47 million smaller than last year's. Also, the city workforce is 7 percent smaller than it was seven years ago and the smallest in 10 years, the mayor said.

Hawaii's counties are among the few municipalities in the nation that are taxed for purchases, Harris said. The City and County of Honolulu pays $26 million to $30 million annually.

He said the state exempts itself from paying excise taxes and some $58 million in property taxes to the city.

Harris said he also wants the Legislature to transfer about $10 million in traffic fines and forfeitures revenues to the counties.

The money, he said, should then be earmarked for the counties to help provide competitive wages for police officers. He estimates that Honolulu spends $16 million to $18 million a year issuing traffic tickets, yet receives none of the revenues.

Big Island Mayor Stephen Yamashiro, like Harris, testified in favor of exempting counties from paying the excise tax. He also called for allowing the counties to receive a portion of the public service company tax, or public utilities tax.

Maui Mayor James "Kimo" Apana asked that the counties be granted additional taxing powers or be given state grants tied to the state general excise tax.

Wallace Rezentes Sr., administrative assistant to Kauai Mayor Maryanne Kusaka, called for giving the counties the power to set their fee schedules and penalties associated with the disposal of vehicles.

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