The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on May 16, 2025.
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May 16, 2025, 9 a.m.
Kalana O Maui Building,
To: Maui County Council
Alice Lee, Chair
Yuki Lei Sugimura, Vice Chair
From: Grassroot Institute of Hawaii
Jonathan Helton, Policy Analyst
Re: Council Communication 25-8 — A PROPOSED AMENDMENT TO BILL 41, CD1 (2025)
Aloha Chair Lee, Vice Chair Sugimura and other members of the Council,
The Grassroot Institute of Hawaii supports Chair Lee’s amendments to the fiscal 2026 real property tax rates contained in Council Communication 25-8.
These amendments would restore the tax rates proposed in the mayor’s FY26 budget for some property tax classes, as described in Table 1 below.
Table 1: Current proposed rates versus CC 25-8 proposed rates
| Tax class | Current proposed fiscal year 2026 rates | CC 25-8 proposed Fiscal year 2026 rates |
| Hotel and Resort | 12 | 11.75 |
| Time Share | 16.6 | 14.6 |
| TVR-STVR | ||
| Tier 1 (<= $1M) | 12.5 | 12.5 |
| Tier 2 ($1M to $3M) | 13.5 | 13.5 |
| Tier 3 (> $3M) | 16.5 | 15 |
| Long-term rental | ||
| Tier 1 (<= $1.3M) | 2.95 | 3 |
| Tier 2 ($1.3M to $3M) | 5 | 5 |
| Tier 3 (> $3M) | 10 | 8 |
Together, these rate changes would reduce property tax revenues by approximately $14.5 million.
The Economic Research Organization at the University of Hawaiʻi projects that economic uncertainty created by federal policy changes will reduce visitor arrivals to Hawaii by 4% over the next two years, reducing visitor spending by $1.6 billion.[1]
In a report issued May 9, UHERO pointed out that, in particular, the “pullback in Canadian travel will have an outsized impact on Maui, which in 2023 hosted more Canadian visitor days than any other county.”[2]
Higher taxes on visitor accommodations could also affect travel to Maui at the margin. People would certainly still come to visit the Valley Isle, but higher prices would either cause fewer people to visit or a reduction in spending by those who do visit, which would affect local businesses that depend on tourism revenues.
Thank you for the opportunity to testify.
Jonathan Helton
Policy Analyst
Grassroot Institute of Hawaii
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[1] Carl Bonham, Byron Gangnes, Steven Bond-Smith, et al., “Federal Policies Push Hawaii Toward Mild Recession,” Economic Research Organization at the University of Hawaiʻi, May 9, 2025, p. 14.
[2] Ibid, p. 14.
