Felix introduces bill
to limit property
tax assessments

His proposal would cap tax increases
at 15 percent in any year

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By Gordon Y.K. Pang
gpang@starbulletin.com

A homeowner's property taxes would not go up more than 15 percent in a given year under a bill introduced in the City Council.

Councilman John Henry Felix introduced the measure yesterday at least in part due to complaints raised last month by constituents in East Honolulu and Windward Oahu who claimed that their assessments went up by as much as 50 percent.

Values islandwide went up an average 4.7 percent, but up an average of 7.8 percent in East Honolulu and 7.7 percent in Windward Oahu.

Property taxes are based on multiplying the assessed values by the tax rates given to the different property classifications.

Mayor Jeremy Harris has promised not to recommend an increase in rates this year, and Council leaders have vowed not to vote for them.

Felix, however, said more needs to be done because the assessments by themselves can lead to much higher taxes. Often, he said, those increases in taxes are the result of circumstances beyond the control of homeowners such as market fluctuations, sales to offshore investors or changes in the method of assessment.

The 15 percent "cap" proposed by Felix would not apply if there were new construction, improvements or major repairs to a home. It also would not apply to property that is sold or transferred during the assessment period of a given year.

Felix said that the bill should not be compared to the controversial Proposition 13 initiative approved by California voters in 1978 which capped increases in valuations at no more than 2 percent annually.

Placing a ceiling on valuations or rates would negatively affect the city's bond rating, he said. His bill, he said, would allow for heftier tax bills to go into effect in subsequent years if the higher assessment were still being used.

The idea is not to freeze the amount of taxes paid by a homeowner, but to soften the impacts caused when valuations increase drastically at one time, he said.

"What we're concerned about are our taxpayers who are existing on fixed incomes, and they are hardest hit when there are inordinate increases in their tax bills," Felix said.