Proposal cuts golf Oahu golf course owners want the City Council to give them a break on their property taxes.
course taxes
Several City Council members
oppose Rene Mansho's billBy Gordon Y.K. Pang
gpang@starbulletin.comA bill introduced by Councilwoman Rene Mansho would do that by creating a new property tax classification for golf courses, with a lower tax rate.
Golf courses are "helping with their open space and green space and their ability to recharge the aquifer," Mansho said. "Most golf courses are used for landscaping, flood drainage ways, so they have an important value. So why are we taxing them at the same rate as high commercial users like hotel, commercial and industrial?"
Several of Mansho's colleagues, however, question the need to give a certain industry a tax break, particularly when the city is hurting for revenues.
Councilman Steve Holmes said: "The whole notion of giving tax breaks for golf courses in a year where we're financially constrained is outrageous. If you give tax breaks to the golf courses, someone else has to make up the difference."
Golf courses are now classified as conservation parcels, which are taxed at $9.25 per $1,000 of assessed value. Mansho said one possible scenario would establish a golf course classification taxed at a rate similar to unimproved residential properties, which are taxed at $4.66 per $1,000 of value.
For comparison, single-family homeowners pay $3.65 per $1,000; commercial owners, $9.25; and hotel-resorts, $9.96.
The plan, according to Real Property Tax Division records, could cost the city about $2.09 million annually in lost revenues, just less than half the $4.22 million the city now collects in property taxes from golf courses.
The actual tax rates businesses and homeowners will pay for the coming fiscal year are in the process of being set in budget hearings in the City Council.
Mansho's bill will get a hearing in the Budget Committee so that golf course owners can have their say, said chairwoman Ann Kobayashi. But at first blush, she said: "Let's classify lands properly. Is it unimproved land or a commercial activity?"
She added that, "people buy and sell golf courses, and obviously they look at it as a business activity."
Holmes also differs with Mansho on the value of golf courses. "They take up a huge amount of open space," he said. Further, he said, they use up the island's water supply while releasing potential pollutants from fertilizers and pesticides.
Councilman John Henry Felix warned that creating a classification just for golf courses would "set a dangerous precedent."
Mansho said she is introducing the legislation at the request of golf course owners.
Mel Nagata, general manager of Waikele Golf Course, said owners are paying taxes based on values inflated during Japanese real estate speculation in the 1980s to early 1990s.
Courses today are being sold for 10 percent to 20 percent of what they were worth about seven years ago, Nagata said.
"What we're hoping is to get our property taxes along the lines of half of what we're paying right now," said Ronald Huffman, director of the Coral Creek Golf Course. "Right now, none of us are making a profit."
Huffman said 11 golf courses have appealed their current assessments.
City & County of Honolulu
