Last-minute lobbying by Mayor Mufi Hannemann saved a proposal to create a separate “;homeowners”; class for real property taxation.

But some members said the resurrection of the bill—coming hours after the full Council voted to recommit it yesterday—came at the expense of the Council's integrity, with the appearance that it was manipulated by the Hannemann administration.

Council members Ikaika Anderson, Romy Cachola and Ann Kobayashi voted against the measure, but not before offering pointed criticism toward colleagues, including Chairman Todd Apo.

“;I hope it has got nothing to do with a compromise on the landfill or the rail,”; Cachola said. “;I know there are things behind this.”;

Kobayashi apologized to the public. “;What assurance does the public have that the actions we take, the votes we take, are going to mean anything?”; Kobayashi said.

  City Council Members Turn Down Homeowner Tax Break Proposal

 

Honolulu Mayor Mufi Hannemann's proposal to raise taxes to make up for revenue loses from lower property valuations was shelved by council members.

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Apo said Hannemann asked to meet with him shortly after the Council voted unanimously to send the bill back to committee, with the express intent of using another bill to keep the concept of a homeowners classification alive.

“;We did not discuss anything except this bill—no landfill, no transit, nothing else,”; Apo said of his meeting with Hannemann. “;It was expressed to me how vital the administration felt this was, and I'm willing to work with them.”;

The proposal, Bill 51, now goes to Hannemann, who is expected to sign it.

Council members revived the proposal at about 6:30 p.m., roughly seven hours after it was voted down. City Managing Director Kirk Caldwell asked permission to submit further testimony on the matter.

Caldwell said if the city is to provide some form of tax relief to homeowners through the homeowners tax classification, the measure had to be taken up now in order to get next year's tax bills prepared on time.

Renters raised concerns that raising taxes on property owners could lead to higher rents, but the city has cited two mainland studies that suggest that would not happen. The administration was working on proposed legislation at the state level that would have created a tax credit for renters to offset any such increases.

The homeowners classification allows the city to differentiate between owner-occupants and property owners who do not live in their dwellings, with the possibility of separate tax rates for true homeowners.

Opponents of the separate class say the city already can ease taxes on owner-occupants by adjusting the $80,000 property tax exemption that can be claimed by homeowners.