The Honolulu City Council’s subcommittee meant to sort through a slew of largely Council-initiated real property tax measures to aid homeowners affected by the approximately 10% or greater increase in real property tax assessments on Oahu is scheduled to hold its first public meeting today.
Established on April 19, the Council’s Permitted Interaction Group, or PIG, includes Chair Tommy Waters, Vice Chair Esther Kia‘aina, Radiant Cordero and Matt Weyer. According to its agenda, the group’s 10 a.m. meeting will discuss real property tax bills addressing long-term rental classifications or exemptions, modification to the real property tax credit, homeowner exemptions and Residential and Residential A real property tax rate classifications.
If approved, many to all of these Council-initiated tax proposals would not take effect immediately, likely not until 2025.
The Council’s stated tax relief measures coincide with Mayor Rick Blangiardi’s offered one-time $300 tax credit — now called Bill 14 — that would be given to nearly 152,000 qualifying homeowners as part of the city’s proposed $3.41 billion operating budget for next fiscal year. The rebates — funded in the mayor’s budget for a total of about $45.5 million — would be granted to those with an active home exemption on their 2023 assessments, regardless of property value.
If approved, the city’s one-time tax credit — tied to the mayor’s latest budget — would take effect July 1.
During a special meeting Monday of the Council’s Committee on Budget, discussion arose over the mayor’s tax measure, Bill 14.
Prior to the meeting, Council member Weyer submitted an amendment to Bill 14 that, if adopted, would have allowed many qualifying homeowner occupants paying lower-tier tax rates — particularly Department of Hawaiian Home Lands beneficiaries and those with historic- home exemptions — to not have to pay the city’s required minimum real property tax exemption payment of $300 for one year, starting July 1.
“Essentially, it was just extending the applicability to include those at the lower end of the real property tax payment,” Weyer said.
However, Weyer withdrew his amendment after subsequent discussions with city staff.
To clarify, Andrew Kawano, the city’s Department of Budget and Fiscal Services director, told the budget committee that the city opposed “the ignorance of the minimum tax with regard to Bill 14.”
“The administration opposes that because we believe that everyone should pay some tax; everyone receives services,” Kawano said. “We’ve had the $300 minimum tax in place for years, and if we completely take it away, all homeowners with homeowner exemptions that, for instance, have a historical-preservation benefit would also not pay minimum tax the way it’s written, and that’s concerning because we’re really targeting the right group of taxpayers when we do that.”
Kawano added, “Bill 14 as proposed by the mayor should be kept as is.”
Meanwhile, Kia‘aina wanted to see the mayor’s proposed $300 tax credit increased “to at least $350 or $400.”
In response, Kawano asserted that “every $100 is $15.5 million that we’re going to have to find to fund … in terms of increasing the credit.”
During public testimony Natalie Iwasa, a certified public accountant, said she supported Kia‘aina’s proposed increase to the mayor’s one-time tax credit for its benefits to long-term renters as well as landlords.
“That will help mitigate the risks that they would increase rents for their tenants, so I very much support that,” Iwasa said.
Later, Cordero said she wanted to hold further review and discussion on Bill 14 till the next Committee on Budget meeting, May 23.
Correction: This story has been updated to clarify a public meeting will be held.
