The proposed property tax breaks keep on coming. The latest one would increase exemptions for homeowners and kupuna.
The council June 2 passed a $785.9 million budget, which was $175.8 million, or 28.8% , higher than the current year. But while the measure, which goes into effect July 1, has been sent to the mayor, there’s still room to tinker with the revenue side of the equation, as evidenced by measures to be considered this week.
Bill 182, to be taken up by the County Council Finance Committee at 10:30 a.m. Tuesday, doesn’t change tax rates but would increase the value of property that would be taxed. The bill also adds two new categories for kupuna exemptions — 65 years and 75 years — while increasing the amounts exempted.
The exemptions would go into effect Jan. 1.
“Using the approach of a homeowners exemption rather than reducing tax rates really targets low income households and the seniors,” said Hamakua Councilwoman Heather Kimball, the bill sponsor. “It’s very targeted and that’s the intention.”
The bill would totally exempt property under $50,000 in value from property taxes, instead of the current $40,000. That means the property owner would pay only the $200 minimum annual tax.
For property over $50,000 in value, the homeowner exemption would be $50,000 rather than the current $40,000. With the median home value at $517,000 approximately half the homeowners would get a 20% reduction in their taxable value, Kimball said.
Finance Director Deanna Sako said the measure, based on current property values and beginning Jan. 1, midway through the budget year, would reduce revenues by about $1.2 million.
“The exemption amounts (basic exemption of $40,000 and age exemptions at 60 and 70) have not changed since 1990 that were effective for tax year 1991, however in 2005 an additional exemption of 20% was added,” Sako said.
Homeowners between 60 and 65 years old would get $85,000 of their property value exempted from property tax instead of $80,000. Those between 65 years old and 70 years old would get a $90,000 exemption, a new category.
Those 70 years old to 75 years old would get a $105,000 exemption, compared to he current $100,000. And those 75 years and older would get $110,000 of their property value exempted.
Kimball said the new categories make sense in light of changing demographics and longer lifespans.
“Sixty-five is retirement age for a lot of people and that’s where they shift to a fixed income,” Kimball said.
On Wednesday, the council is set to hear a resolution from North Kona Councilman Holeka Inaba, after his previous effort became a casualty of council colleagues’ differences of opinion on who should get the most tax relief.
Unlike Kimball’s bill, Inaba’s measure doesn’t change property valuations or exemptions, but goes after the tax rate directly.
Inaba’s Resolution 441 lowers real property tax rates for homeowners and affordable rentals by 10 cents, agriculture and native forests by 20 cents and commercial and industrial by 25 cents. Residential tier 1 is lowered by 10 cents, while residential tier 1, apartments and hotel/resort and golf courses would stay at their current rates.
The meetings will be held at the West Hawaii Civic Center, with some council members participating from council chambers in Hilo. The public can participate at those locations, or at the Pahoa or Waimea council offices, or by Zoom by contacting councilremotetestimony@hawaiicounty.gov
