Bill 102 best of three bills but should be retroactive

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on Oct. 31, 2023.

Oct. 31, 2023, 9 a.m.
Maui County Council Chamber
Budget, Finance and Economic Development Committee

Comments on Bill 102 (2023)

Aloha Chair Sugimura and Vice-Chair Kama, 

Thank you for considering Bill 102 (2023), which would exempt from Maui County’s real property tax all real property damaged or destroyed by the August 2023 wildfires and deemed uninhabitable or unsafe. 

Mayor Richard Bissen’s waiver of fiscal 2024 property taxes applied only to improved structures “completely destroyed” in Lahaina, Upcountry and Kihei. This waiver did not help the many owners whose properties were damaged in the fires, but they are equally deserving of tax relief, since their buildings may not be inhabitable or in a condition that is safe to use for business purposes.

Bill 102’s exemption would run from Jan. 1, 2024, through Jan. 1, 2027, and would apply to delinquent taxes and penalties as well as actual property tax bills. 

The property tax waiver would terminate if the property were to be sold between the bill’s enactment and its expiration.

Many of the homeowners and businesses that would be affected by this bill will not have significant earnings for the foreseeable future, so they will be unable to afford their property tax payments. People in this tragic situation should not face the possibility of losing their properties to foreclosure because they could not pay their taxes. 

The Grassroot Institute of Hawaii believes this measure would be a good way to provide relief to property owners affected by the wildfires. It should be the preferred vehicle for fire-related tax relief because it provides business owners tax relief and runs for a longer period than Bill 91.

However, the Institute does recommend that a provision be added that would allow owners of damaged properties to claim retroactive tax relief for the first half of fiscal year 2024, i.e., the taxes that were due Aug. 20, 2023.

The County would stand to lose several million in revenues, but this would not handicap its ability to perform core functions. The mayor’s previous waiver cost the County just $19 million — less than 2% of its $1.07 billion fiscal 2024 budget.

Further, whatever revenue loss this bill might cause might be offset by federal and state disaster assistance to the County. 

However, regardless of the revenue implications, the County should help people keep their properties as they wait for cleanup and insurance payments to allow rebuilding. 

Thank you for the opportunity to testify.

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

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