[ OUR OPINION ]
Residents need relief
from rising tax assessments
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The counties, which generally tie assessments to sales of comparable properties, should consider changes so that long-time residents unable to pay ever-increasing taxes aren't forced to sell their homes. A different system of valuation and exemptions may be necessary and may have to involve the state Legislature as well.
Low mortgage rates have sparked a frenzy of home buying across the state. On Maui, median resale prices for single-family homes rocketed to more than $600,000 earlier this year with a number of sales topping the million-dollar mark as buyers, primarily from the mainland, scoop up real estate.
As a result, residents -- some of whom inherited property through many generations -- are choking on their tax bills, the Star-Bulletin's Gary Kubota reported this week. In the last five years, taxes have increase more than 100 percent in several areas such as Hana, where television talk show host Oprah Winfrey has purchased more than 100 acres. Since assessments are based on recent sale of comparable property, long-time residents who do not have celebrity-sized cash assets are unable to pay higher rates.
The problem is not exclusive to Maui. Other neighbor island residents are encountering similar squeezes as the tight competition for housing boosts prices.
Each county government sets assessment levels and each has various "circuit-breaker" programs to provide relief, primarily based on percentages of income. In addition, residents' protests, such as those on Kauai, have prompted officials to lower assessment rates. Counties also offer homeowner exemptions, regardless of income, that increase as a person ages.
On Maui, worried homeowners are suggesting caps on assessments, but county officials should be cautious in adopting such proposals. California's Proposition 13, which limits taxes to 1 percent of a home's market value and freezes values until property is sold, suffocated that state's spending and has led to vast disparity in tax liabilities.
Unlike in other states, county property taxes do not finance schools, but are the primary revenue source for municipal operations from trash collection and sewers to park maintenance and law enforcement. As demands for services have increased along with population growth, counties have been hard pressed to find money to keep up. Nonetheless, the current real estate boom should not unfairly burden ordinary homeowners.
