Last June, during a mayoral campaign event in Kailua-Kona, then-candidate Harry Kim criticized property tax increases by his predecessor.
Last June, during a mayoral campaign event in Kailua-Kona, then-candidate Harry Kim criticized property tax increases by his predecessor.
“You should be prudent in how you collect, and very prudent in how you spend,” he said at the time.
Kim kept that stance in January, as he began assembling information two months into his new term.
“This is no time to consider — even remotely consider — tax increases to the people of this island,” he told Big Island newspapers Jan. 18.
Then, reality hit.
Costs were coming in much higher than expected, and revenues were coming in lower.
“How can I raise taxes on these people?” Kim began asking.
Turns out, he can.
Kim is proposing 6.5 percent across-the-board tax rate hikes, with the exception of the affordable rental class, which will stay the same.
The public thus far has had little to say on the rate hikes. A public hearing Tuesday evening brought out only a dozen testifiers. Most seemed resigned to a tax hike, if not completely embracing it.
“I consider these tax hikes well within the realm of acceptability,” said Joyce Folena, testifying from Pahoa.
Jon Olson, also of Puna, called the tax hikes “long overdue.”
Garth Yamanaka, in Hilo, urged the county to become more efficient, such as by making it easier to get building permits to stimulate construction, “before taking the easy way out and raising taxes.” Floyd Eaglin agreed the county needs to be more efficient. Plus, he added, employees need to realize they have a job, not a place to socialize.
Most testifiers seemed to agree with raising tax rates for second homes and hotels, but some were less enthusiastic about raising taxes for homeowners.
Three people submitting written testimony were mixed in their suggestions.
“We are OK with a property tax increase,” wrote Waikoloa resident Gail Jackson. “Perhaps a smaller home increase and a larger hotel increase?”
Janice Palma-Glennie of Kailua-Kona, in a joint written testimony with Alastair Glennie, called a 6.5 percent increase “extreme” for low and middle income homeowners.
“Kona residents often pay more and sometimes earn less than their East Hawaii counterparts, yet they may be penalized by appraised values for their homes even though they have no intention to sell now or far into the future,” the testimony said.
Property in the homeowner class valued at the island average of $300,000 with no other exemptions would see its annual tax increase $120, from $1,845 to $1,965. Property in the residential class, which includes second and third homes and rentals, valued at the same amount, would see its tax increase $195 from $3,015 to $3,210.
Kim had been incorrectly maintaining since campaign days that property taxes were raised three times in the past five years, a statement he repeated to the County Council last month. Actually, the current round of property tax hikes will be the third since 2010.
The new tax bills will reflect a combination of higher property values and higher tax rates. Of the $36.9 million difference between last year’s tax revenues and this year’s proposed budget, $16 million is from increased valuations. The rest comes from tax hikes.
Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.