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 more likely 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 purpose 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 increased property assessments, which in flip are due largely to excessive dwelling 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 fingers on that extra cash. However for Hawaii householders and renters, it could imply an unanticipated and presumably disastrous increased value of dwelling. It might imply having to sacrifice spending on issues reminiscent of 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 to be 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 are going to don’t have any selection however to extend the lease for his or her long-term tenants if the brand new assessments lead to increased property taxes. In their very own case, their Kailua dwelling 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 case, I’ve a couple of strategies:
>> Within the quick run, decrease the property tax charges to offset the valuation will increase.
>> One other short-term possibility is home-owner exemptions.
>> Within the longer run, all of the counties ought to evaluation their property tax techniques to get rid of favoritism and promote simplicity and equity.
>> On Oahu, Council members ought to take a tough take a look at the Residential A classification, which applies to all nonowner-occupied residential properties. It is likely to be greatest to get rid of that designation altogether, however at a minimal, its Tier 2 threshold needs to be considerably elevated from $1 million, which is just too near the median Hawaii dwelling value.
>> To make sure that property taxes don’t spike in future years, the counties may put a cap on how a lot the property tax income can enhance in any given 12 months. For instance, the common annual enhance over the previous decade was 6.05%, so a restrict of about 5% a 12 months would forestall the counties from making the most of Hawaii’s housing disaster.
>> Typically, at each the state and county ranges, taxes needs to be lowered. Whether or not we’re speaking about property taxes, revenue taxes, company taxes, excise or different taxes, tax discount is without doubt one of the strongest instruments we may 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 development of individuals leaving Hawaii, which has been tearing aside our households and communities and weakening our financial 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.