The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Honolulu City Council Committee on Budget on April 1, 2025.
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April 1, 2025, 9 a.m.
Honolulu Hale
To: Honolulu City Council Committee on Budget
Tyler Dos Santos-Tam, Chair
Radiant Cordero, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: Bill 45 (2024) — RELATING TO REAL PROPERTY TAXATION
Aloha Chair Dos Santos-Tam, Vice Chair Cordero and other members of the Committee,
The Grassroot Institute of Hawaii supports Bill 45 (2024), which would increase eligibility for the low-income property tax credit from $80,000 to $100,000.
Honolulu homeowners often face unpredictable changes in their property tax bills because assessments can increase rapidly year over year. Extending this program to cover more homeowners would help shield them against what has been a volatile real estate market.
Under the current low-income property tax credit, homeowners making $80,000 or less pay no more than 3% of their income on property taxes — for a maximum tax bill of $2,400.
In 2023, the Council increased the eligibility level from $60,000 to $80,000.[1] That was when a two-person household making 80% of the area median income earned about $83,840.[2] But the 2024 80% AMI level for a two-person household increased by 6.3%, to $89,120.
The 2025 AMI figures will likely be released later this month, and in light of recent growth it is reasonable to expect the 80% AMI level will exceed $90,000.
For the Committee’s information, the 4,208 Oahu homeowners received this credit in fiscal 2026, and these homeowners saved $8.44 million as a result.[3]
The Honolulu Department of Budget and Fiscal Services has pointed out in past testimony on this measure that processing the applications for this tax credit creates significant staffing demands.[4]
We encourage the Committee to explore a partnership between the budget department and the state Department of Taxation to verify homeowner incomes. Using income tax data, the budget department could readily identify households eligible for the credit, saving department staff time and keeping more money in homeowners’ pockets.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] Ordinance 23-22.
[2] “Honolulu County Income Schedule by Family Size,” Hawaii Housing Finance and Development Corp., 2023, p. 1; and “Honolulu County Income Schedule by Family Size,” Hawaii Housing Finance and Development Corp., 2024, p. 1.
[3] Departmental Communication 80, Jan. 31, 2025, p. 2.
[4] Andrew Kawano, “Bill 45 (2024) – Relating to Real Property Taxation,” Honolulu Department of Budget and Fiscal Services, Aug. 19, 2024.
