Hawaii County’s tax exemptions should help long-timers, not just old-timers, several County Council members said Thursday.
The council advanced a bill providing additional property tax breaks for seniors, but also asked county staff if they could be limited to kamaaina and others who have lived here more than a few years.
“We got guys coming from the mainland who have never contributed to our tax base before,” Hilo Councilman Aaron Chung said. “And they have a lot of money. They’re buying semi-expensive homes, if not expensive homes. And just because of their age, they are now availing themselves of these exemptions. I think that’s wrong.”
Puna Councilwoman Eileen O’Hara said she agreed and was concerned about unintended consequences to the housing market.
“We’re attracting a migration of people, and not only are they getting a good deal … but that has an impact on affordable housing,” she said.
Currently, residents older than 60 receive an $80,000 deduction in their property tax assessment, which increases to $100,000 at age 70.
The bill proposed by the county administration would provide a $110,000 exemption at age 75 and $120,000 exemption at age 80.
That’s on top of the $40,000 homeowner exemption.
Deputy Finance Director Deanna Sako said the county would consider some sort of long-term residency requirement for the additional exemptions before the bill is voted on again June 5.
The bill comes as Mayor Harry Kim also is proposing 6.5 percent increases in property tax rates to all property classes except for affordable rentals, which would remain the same.
Sako said the administration was looking to reduce the impact of that on seniors.
“They have a harder time on fixed income,” she said.
“That’s an issue we are trying to address.”
The tax increases, including doubling the minimum annual property tax from $100 to $200, will help the county raise an additional $36.9 million in property taxes. Of that, though, $16 million comes from increased property valuations.
The proposed increases were met with some skepticism.
“I’m really not happy,” said Hilo Councilwoman Sue Lee Loy. “We can do better.”
Puna Councilwoman Jen Ruggles objected to increasing the minimum tax, which she said would hurt those who can least afford it.
“It’s a 100 percent increase on the poorest of people,” she said.
County staff say increasing that tax would raise $3 million.
Council members indicated they expect a lengthy session June 5 when they conduct a second reading of the budget.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
