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Grassroot blasts proposed Maui budget tax hikes

County officials are seeking significant property tax increases while doing virtually nothing to cut spending or spend wisely

The Grassroot Institute of Hawaii this week expressed its opposition to the proposed property tax increases in Maui County’s fiscal 2025 annual budget.

In advance of the Maui County Council’s next budget hearing on Monday, Grassroot Executive Vice President Joe Kent said in testimony that “property tax rates for owner-occupied homes valued at less than $1 million would go up by 5.3%; for homes valued between $1 million and $3 million by an astounding 25%; and for homes valued at more than $3 million by 18.2%.

The largest increase, he said, is aimed at homes valued at between $1 million and $3 million, and “given that the median sales price for a single-family home on Maui is $1.3 million, this means that the largest proposed tax increase is aimed directly at the average Maui family.”

Kent said “some might argue that the property tax hikes are needed to offset increased costs this year, especially costs related to the Lahaina response and rebuilding efforts. However, much of the $140 million earmarked for an emergency management program is being funded by grants. … Meanwhile, the estimated increase in property tax revenues from fiscal year 2024 is approximately $51 million.

“Add to that an estimated $45 million in revenue from the county’s general excise tax surcharge and a $260 million increase in grant funds, and it would appear there is no need to raise property taxes at all.”

To make matters worse, he said, “we have significant questions about the effectiveness of the county agencies that have been tasked with construction of temporary housing and facilities.”

Kent said that “over the course of the public comment period on this bill, multiple individuals have testified about the delays and obstructions they have experienced at the hands of these agencies while trying to build temporary shelters. There is nothing to indicate that increasing funding for the Office of Recovery or an emergency management program will fix this problem — it could even cause more bureaucracy, delay and obstruction in the rebuilding process.”

Kent also noted that despite state requests that the county find ways to cut spending, the proposed budget includes only two minor line-item spending cuts, for “highways, streets and transportation” and “social welfare.” Every other department is seeking an increase in expenditures for the coming year.

“In short,” Kent said, “there has been virtually no effort to cut spending, ease the burden on taxpayers, or redirect county funds to areas of greater need.”

He added: “Rather than adding to the financial challenges of Maui’s residents, the Council should be seeking ways to reduce the budget and provide tax breaks to local families and businesses. We urge you to remove all property tax hikes in the fiscal 2025 budget.”

To read the full testimony, please go here.

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