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Tax resolution raises concerns about economy, transparency

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Kauai County Council Committee of the Whole on May 22, 2024.
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May 22, 2024, 8:30 a.m.
Historic County Building

To: Kauai County Council, Committee of the Whole
      Mel Rapozo, Chair
      KipuKai Kuali‘i, Vice Chair

From: Grassroot Institute of Hawaii
           Jonathan Helton, Policy researcher

RE: RESOLUTION 2024-13 — RESOLUTION ESTABLISHING THE REAL PROPERTY TAX RATES FOR THE FISCAL YEAR JULY 1, 2024 TO JUNE 30, 2025 FOR THE COUNTY OF KAUA‘I

Aloha Chair Rapozo, Vice-Chair Kuali‘i and other members of the Committee,

The Grassroot Institute of Hawaii would like to offer its comments on Resolution 2024-13, which would set the real property tax rates for the upcoming fiscal year.

Grassroot is concerned that the Council recently opted to increase the tax rates of the hotel and resort and vacation rental classes. The rates for properties in the hotel and resort class would increase from $10.85 to $11.75 per $1,000 in assessed value.

Vacation rental properties would see their rates increase from $9.85 to $11.30 on the first $1 million of a property’s value; to $11.75 on any value between $1,000,001 and $2.5 million; and to $12.20 on any of the property’s value exceeding $2.5 million.

Some of this new funding would be used to support housing construction — a good goal — but we are concerned that higher taxes could have a negative effect on the island’s economy since it is highly dependent on tourism.

Further, we believe the Council ought to transmit proposed amendments to the property tax rates in advance of any hearing setting said rates.

Several amendments — including the rate changes for hotels and resorts and the rate changes and tiers for vacation rentals — were either proposed or voted on at last week’s meeting without giving the public advance notice.

Because of the significance of the amendments adopted and those proposed but not adopted, the Council should commit to providing greater transparency about changes to the real property tax rates in the future.

We do appreciate the Council providing an opportunity for the public to testify on the amended rates on May 29,[1] and we hope that any proposed amendments to these new rates will be publicized before that meeting.

Thank you for the opportunity to testify.

Jonathan Helton
Policy researcher
Grassroot Institute of Hawaii
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[1] Notice #: 0001455360-01, published in The Garden Island, May 15, 2024.

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