Offer tax relief to all Lahaina properties, not just homes

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on Dec. 1, 2023.

Dec. 1, 2023, 9 a.m.

To: Chair Alice Lee
Vice-Chair Yuki Lei Sugimura
Maui County Council

From: Jonathan Helton, Policy Researcher
Grassroot Institute of Hawaii

Comments on Bill 95

Aloha Chair Lee, Vice-Chair Sugimura and other Council members,

Thank you for considering Bill 95 (2023), CD1, which would provide property tax relief to those who were affected by the August 2023 wildfires.

Specifically, the bill would do four things:

>> Exempt all destroyed properties in Lahaina from the Maui County property tax for fiscal year 2025.

>> Provide a tax break to property owners who rent to displaced residents.

>> Guarantee that everyone who had a homeowner or other exemption on a property that was damaged by the wildfires be able to keep it for fiscal 2025, unless they sell the property at arms length or apply for the same exemption on a new property.

>> Exempt all owner-occupied and long-term rental properties in the yellow and red reentry zones from the tax for fiscal years 2024 and 2025.

Overall, the Grassroot Institute of Hawaii welcomes Bill 95 as it would help protect property owners from the possibility of losing their homes or livelihoods to tax foreclosure.

However, we suggest the Council amend Section 1 of the bill to provide that all real property in the red and yellow burn zones —not just owner-occupied and long-term rentals — be exempt from the property tax for fiscal years 2024 and 2025.[1] According to figures from the Maui Department of Finance, this would cost the county an estimated $7.6 million.[2]

At the very least, the exemption should be given to properties in the commercial, commercialized residential, industrial, apartment and agriculture classes. Such relief would help those owners keep their properties as well, and would cost the county only $350,446.

In other words, the gains from the exemption would be worth the cost.

Thank you for the opportunity to testify.

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

[1] Section 1 of the bill can be viewed on pp. 6-7 here.
[2] Letter from Scott Teruya to Yuki Lei Sugimura, Nov. 20, 2023, p. 3.

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