By Keli‘i Akina
Hawaii’s inhabitants has been declining for six straight years, and if policymakers don’t do one thing rapidly to avert the looming enhance in county property taxes, that’s prone to proceed.
That’s as a result of taxes are a key element of Hawaii’s excessive value of dwelling, which surveys present is the No. 1 motive individuals have been leaving.
As I wrote in my Dec. 17 column, “Counties shouldn’t revenue from Hawaii housing disaster,” the potential spike in county property taxes is because of greater property assessments, which in flip are due largely to excessive house costs and accelerating inflation.
Since property taxes are primarily based on property assessments, the counties stand to obtain a windfall of tax revenues — with out even having to lift their charges.
Little question, some county officers would like to get their palms on that extra cash. However for Hawaii householders and renters, it might imply an unanticipated and presumably disastrous greater value of dwelling. It might imply having to sacrifice spending on issues resembling meals, medication, clothes, transportation and easy leisure simply to allow them to maintain roofs over their heads.
Is it any surprise so many Hawaii residents are struggling to make ends meet, that so many individuals within the state have left or are planning to go away, and that so many residents are homeless?
I’m not making this up. That is actually occurring. And it seems destined to proceed occurring — until county officers step up and discover methods to counter it.
For instance, a revered, longtime native couple wrote in Honolulu Civil Beat on Thursday about how they may don’t have any selection however to extend the lease for his or her long-term tenants if the brand new assessments lead to greater property taxes. In their very own case, their Kailua house simply moved up to the county’s Residential A (Tier 2) property tax class, which doubles the tax charges of nonowner-occupied properties value greater than $1 million.
For county lawmakers who haven’t settled on what to do about this example, I’ve a couple of recommendations:
>> Within the quick run, decrease the property tax charges to offset the valuation will increase.
>> One other short-term choice is house owner exemptions.
>> Within the longer run, all of the counties ought to overview their property tax methods to eradicate favoritism and promote simplicity and equity.
>> On Oahu, Council members ought to take a tough have a look at the Residential A classification, which applies to all nonowner-occupied residential properties. It is perhaps greatest to eradicate that designation altogether, however at a minimal, its Tier 2 threshold must be considerably elevated from $1 million, which is simply too near the median Hawaii house worth.
>> To make sure that property taxes don’t spike in future years, the counties might put a cap on how a lot the property tax income can enhance in any given 12 months. For instance, the typical annual enhance over the previous decade was 6.05%, so a restrict of about 5% a 12 months would stop the counties from benefiting from Hawaii’s housing disaster.
>> Generally, at each the state and county ranges, taxes must be lowered. Whether or not we’re speaking about property taxes, revenue taxes, company taxes, excise or different taxes, tax discount is likely one of the strongest instruments we might use to make Hawaii extra affluent and inexpensive.
This isn’t a time for half-measures. County lawmakers should act now to stop a dangerous property tax enhance. Allow us to finish the pattern of individuals leaving Hawaii, which has been tearing aside our households and communities and weakening our economic system.
This isn’t simply a possibility to stop a disaster. It is also step one towards making Hawaii extra inexpensive for everybody.
Keli‘i Akina is president and CEO of Grassroot Institute of Hawaii.