Hilo Councilman Aaron Chung wants to earmark part of a luxury tax on second homes to be used to help those who don’t have a home at all.
Bill 111, likely to be heard Feb. 8 by the County Council Finance Committee, would tap 75% of the tier 2 tax for county-sponsored homeless programs for five years. The second tier raised about $10 million in taxes last year.
“We’re generating extra moneys from people with second homes,” Chung said. “The affected persons aren’t fond of that idea, but it’s my hope if they see it’s earmarked for those less fortunate, they may be more accepting of that.”
The tax, approved in 2020, imposes $13.60 tax per thousand dollars worth of property value over $2 million for property in the residential — or second home — category, compared to $11.10 in tax per thousand for the portion of the property under $2 million. In contrast, the homeowner rate is $6.15 for a primary residence.
The council, at Chung’s request, heard a full briefing last month on homelessness issues, with agencies affirming they could end homelessness with sufficient resources.
“We say that because that’s our guiding post. We need to have a vision of where we want to be,” Brandee Menino, chief executive officer of HOPE Services Hawaii, told the council Human Services and Social Services Committee on Dec. 7. “We are here because our mission is to end homelessness. It’s not to stall homelessness or make it longer or something.”
Homeless programs can be expensive. Temporary housing in 32 micro-housing units situated at the NAS swimming pool near the old Hilo airport consumed $40,000 a month in federal funds before they were closed in July after the money ran out. The fate of those units is unclear. Housing Administrator Susan Kunz did not return a call by press-time Wednesday.
Homelessness has especially generated complaints in West Hawaii, where campsites on county beaches have raised beachgoer’s hackles. But Hilo has been getting its share of complaints lately as well, with a letter-to-the-editor writer Wednesday lamenting campers and carts blocking sidewalks along Bayfront.
The county administration is currently working on its second budget under Mayor Mitch Roth. The mayor has to deliver a balanced budget proposal to the County Council by March 1 and then a final proposal by May 5. The council has the power to raise or lower tax rates and make budget amendments before sending it back to the mayor.
The administration has typically resisted efforts to earmark funding, preferring instead it go into the general fund to be spent on budget priorities as needed.
Chung and county Finance Director Deanna Sako differ on the wording of the bill, which Sako takes to mean 75% of all the residential properties in that category, rather than just the portion with the higher tax rate. That would take $56 million out of the county budget, she said Wednesday.
Chung said that’s not his intent, and if the wording needs to e clearer, he can do that.
Last year, Chung sponsored a bill that would have allowed the property owners to write off that $2.50 extra tax if they provided proof they donated the amount to a recognized 501(c)(3) nonprofit that benefits Hawaii County residents or to county-sponsored homelessness initiatives. That bill was postponed for tweaks.
“This one is completely different,” Chung said. “Because the other one was opposed by the administration and got a lukewarm response from council members, at best, I figured I would redo it.”
