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Senior citizens
may lose their
real property tax
exemption

A plan to ease the burden
for low income families
would hurt the elderly

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By Gordon Y.K. Pang
Star-Bulletin

Senior citizens who now enjoy a real property tax exemption based on their age may see that exemption eliminated in favor of a "circuit breaker" tax credit designed to ease the tax burden for low income families of all ages.

That proposal is one of several property tax measures to be discussed at a City Council Budget meeting tomorrow.

Bill 60 would allow all homeowners with an adjusted household gross income below 80 percent of Honolulu's median income to qualify for a "circuit breaker" tax credit. Current median area income is $60,900, meaning the qualifying income would be $48,720.

Other topics Topics to be heard at the 9 a.m. meeting tomorrow in the second-floor committee room at Honolulu Hale include: A resolution requiring the City Council to come up with a single, uniform property tax rate by fiscal 2002. Key proponents include apartment and condominium owners, businesses and resort property owners who feel current policies are unequal. Two bills designed to give tax relief to owners of agricultural land. A bill establishing a real property tax credit for high-tech companies in order to attract such businesses.

Proponents of the circuit breaker -- such as Lowell Kalapa of the Tax Foundation of Hawaii -- praise it for helping families most in need of tax relief.

But the proposal does not sit well with St. Louis Heights widow Barbara Miller, a retired federal worker.

Miller, 66, said she and other senior citizens don't believe property taxes should be based, even in part, on how much income people have.

"I pay income tax to the federal government and the state of Hawaii," Miller said. "I should not pay property taxes based on my income."

Miller said she has calculated that she will need to pay at least $200 more annually in property taxes if the bill becomes law, a burden on her fixed income.

Miller said she is not opposed to assistance for lower income families -- just not at the expense of those now receiving exemptions.

Bill 60 would delete all exemptions now enjoyed by homeowners 55 years of age or older. Seniors would be allowed only to take a standard $40,000 exemption that all homeowners get.

Currently those 55 to 59 get a total exemption of $60,000, those 60 to 64 $80,000, those 65 to 69 $100,000, and those 70 and older $120,000.

Under Bill 60, property owners of all ages who qualify for the tax break would pay no more than 3 percent of their adjusted gross income in property taxes.

Currently, that limit is at 5 percent, and there is a $500 maximum on the tax credit.

Marian Huff of Hawaii Kai who, along with her husband, also get senior exemptions, said she and her husband still work part-time to help pay the bills.

She said the couple make less than the median income but more than the qualifying income.

The bill "would mean we would have to pay more, naturally, because we would lose our basic exemptions," she said.

Councilwoman Rene Mansho, who heads the Budget Committee, said she has asked Mayor Jeremy Harris and his Department of Budget and Fiscal Services to take to tomorrow's meeting statistics to see how many senior homeowners currently receive multiple exemptions and what impact the bill would have on them.

Budget Director Roy Amemiya did not return calls yesterday.

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City & County of Honolulu