Council members urge property-tax cuts

Soaring real estate values bring calls for the city to lower rates

City Council members are calling on Mayor Mufi Hannemann to reduce property tax rates to counter skyrocketing property values.

"It's just out of hand. People are reporting 300, 400 percent increases in their taxes. That's really too much, too soon," said Councilwoman Barbara Marshall, who paired with Councilman Todd Apo to introduce a resolution calling on the mayor to submit a budget next year that reflects a lower rate on residential and apartment property tax classes.

"We have just had too many tax increases in a very short period of time," she said.

But Hannemann said merely talking about reducing rates is "cheap rhetoric."

Council members who want to reduce taxes should be ready to cut the budget as well, the mayor said.

"If we're going to reduce the rates, I need to hear from them on where they want to cut expenses," Hannemann said. "She has to be real clear. Shall we cut in her district? Which parks does she want us to cut? Which services does she want to reduce?"

Assessments mailed out last week showed an overall increase in property values of nearly 26 percent. But some areas of the island saw values jump by as much as 50 percent.

Hannemann has promised to introduce legislation for a one-time $200 tax credit for those 62 and older to help soften the blow of the rising assessments.

Hannemann is also proposing adding more money to the city's "rainy day" fund -- from $5 million to about $50 million -- to improve the city's credit rating. A better credit rating means lower interest rates for the city.

Hannemann said Honolulu faces rising debt, and increases in salary and employee benefits.

"How do we meet these future obligations that we have, as well as fixed costs that keep going higher and higher and higher?" Hannemann said.

"It's very easy to say we should reduce the rates. I'd like to reduce the rates, but at the same time, I've got to look at the total picture."

Marshall defended her proposal.

"It is not cheap rhetoric. It's a very sincere concern on my part that we're just going too far with this," said Marshall, adding one of the first places to start looking is the proposal to add more money to the city's reserves.

"I think that's certainly the place to start. I don't think that right now is the time to be putting away $50 million in a rainy day fund," Marshall said.

Marshall said instead of a fund for unspecified costs, the administration should budget now for those future specific expenses.

"I think taxpayers are more comfortable knowing where their money is going," Marshall said. "I think it's great that the mayor is looking forward to those kinds of things ... but I'd rather see us doing it specifically."