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Kauai group petitions
for tax reform


LIHUE >> Community activists spurred by rising property taxes filed a petition this week to place a residential property tax rollback on the Nov. 2 ballot.

If it is approved by the voters, the measure would roll back property taxes on owner-occupied homes belonging to Kauai residents to fiscal 1999 levels. It then allows for an annual increase of no more than 2 percent in tax bills.

The group, which calls itself Ohana Kauai, filed petitions containing more than 2,300 signatures, more than the 1,870 required, or 5 percent of the county registered voters at the last general election.

Kauai has not had an initiative on the county ballot for 20 years.

Ohana Kauai said that since residents began receiving their new tax bills this spring, there has been no problem finding people to sign their petitions.

Since Kauai's real estate boom began in late 1998, property tax collections by the county have increased by about 50 percent. All of the new county revenue is due to soaring property values. Overall property tax revenue -- $47.5 million in the current fiscal year -- makes up about 60 percent of all county income.

A landowner's property tax bill is determined by two things: the value of the land and the tax rate set by the county. Valuation increases have been double-digit for the past few years while the tax rate has been lowered by about 2 percent.

During the current fiscal year, which ends June 30, property tax revenue on Kauai increased 13.5 percent. Measures to provide tax relief reduced taxes 1 percent overall.

The 2005 budget is now being worked on. The Council already passed an across-the-board tax cut of 20 cents per $1,000 of assessed valuation. That reduction would leave Kauai County with 24.5 percent more property tax revenue in fiscal 2005 than it is receiving this year.

As a result, Mayor Bryan Baptiste submitted a $103 million budget request, up from $98 million this year. Baptiste has suggested some additional tax relief, but even that would give the county 20 percent more revenue than last year.

"They've (Council members) shown no real ability to resist spending," former Council chairman and Ohana Kauai member Ron Kouchi said yesterday.

In response to skyrocketing tax bills, Baptiste and the Council jointly appointed a Tax Task Force. That panel is putting the final touches on a proposal that would drastically alter the way property is valued for tax purposes.

Walter Lewis, spokesman for Ohana Kauai, said the fiscal impact of the ballot measure would be quite minor, costing the county about $1 million a year. Continued increases in the value of other classes of property that would be unaffected by the rollback would make up for the lost $1 million, he said.

Baptiste's office said the measure is "being studied."

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