Group files appeal
for tax rollback

A court ruling had invalidated
a Kauai vote on property taxes

Kauai taxpayers, stung by rising real property taxes, went to the polls and approved a rollback in taxes last year -- only to see a judge nullify their votes. Now, a group that pushed the issue is taking the case to the Hawaii Supreme Court.

Robert Thomas, attorney for Hawaii Center Pacific Legal Foundation, filed the appeal yesterday on behalf of Ohana Kauai. "This is something that we believe the Supreme Court needs to address because it is not only an issue for Kauai County, but for the other counties as well," Thomas said.

Homeowners in all counties are facing rising property taxes because of skyrocketing home prices. The median sales price for single-family homes on Kauai last month was $665,000. It was $780,000 on Maui, $610,000 on Oahu and $371,000 on the Big Island.

Kauai voters approved an amendment to cap annual property tax increases for all homeowners to 2 percent last November and to roll back property taxes to 1998-99 levels for residents who have owned their homes for the past six years.

But Circuit Judge George Masuoka invalidated the charter change in February after county attorneys sued the mayor, the director of finance and the County Council to block the amendment.

The county lawyers took the unusual step because they argued the amendment is unconstitutional since the county, not residents, is responsible for tax reform and policy.

The group is hoping the state's high court will rule on the case before the county's 2006 budget goes into effect, "because the county would be spending money it's not entitled to," Thomas said.

Kauai County Council members unanimously approved a record $122 million operating budget last month which takes effect July 1.

Thomas said the county has no contingency if it loses the case. So if the Supreme Court upholds the amendment after the budget takes effect, Kauai taxpayers will have to pay back the money the county should not have spent, he said.