Maui County Real Property Tax Rates Increase July 1, 2013

County Council OKs property tax hikes

WAILUKU - Real property tax rates will increase beginning July 1 after the Maui County Council on Wednesday morning approved a resolution setting the higher rates for fiscal 2014.

Most tax rate categories will see varying increases from a low of 5 cents to a high of 25 cents per $1,000 of net taxable assessed valuation. The residential category will see no increase. That classification usually includes second homes used as rentals.

Overall, the council's property tax rates are lower than those proposed by Mayor Alan Arakawa, although the mayor would have kept homeowners' tax rates unchanged at $2.75 per $1,000.

The resolution passed with a lone dissenting vote cast by Council Member Don Couch and with several testifiers opposing higher rates.

Council Members Stacy Crivello, Elle Cochran, Mike White, Don Guzman and Council Vice-Chairman Bob Carroll all voted in favor of the measure. Council Chairwoman Gladys Baisa, and Council Members Mike Victorino and G. Riki Hokama were absent and excused.

After the meeting, Couch said he voted against the property tax rates because, through the years, taxpayers in the commercial category "have been hit quite a bit" with proportionately higher property tax rates versus those in other categories, especially homeowners. In fiscal 2014, the commercial category will see its rates climb from $6.90 to $7.05, per $1,000 of net taxable assessed valuation.


Property Tax Rates
Maui County Real Property Tax Rates for Fiscal 2014*

Classification Current Rate New Rate
Residential $5.75 $5.75
Apartment $6.20 $6.40
Commercial $6.90 $7.05
Industrial $7.10 $7.30
Agriculture $6.00 $6.05
Conservation $6.20 $6.25
Hotel and Resort $9.15 $9.40
Time Share $15.50 $15.55
Homeowner $2.75 $2.87
Commercial Residential $4.50 $4.60
* Rates listed are per $1,000 of net taxable assessed valuation. Fiscal 2014 begins July 1.

"Homeowners are paying a whole lot less than everyone else, and they are using (county services) the most," Couch added. "Homeowners, and I'm one; homeowners need to (pay) a little bit more as they are getting most of the benefits."

Recognizing that no one wants to "tax anyone out of house and home," Couch said the county has the circuit breaker safety net program for homeowners. The program allows those who qualify for a homeowner exemption and whose real property taxes exceed 2 percent of their adjusted gross income to apply for the tax credit.

But Couch said the majority of the homeowners he has spoken with also agree that they pay too little in property taxes.

Under Wednesday's approved rate structure, homeowners will see their rates go from $2.75 to $2.87 per $1,000 of net taxable assessed valuation.

Korean War veteran Fred Ruge, who said he was an advocate for the elderly on Maui, called for no increases in the apartment category property tax rate.

He said that as a direct result of the proposed rate hike, he has already been told by his apartment landlord that his rent will be going up by $25 a month, which turns into an extra $300 per year.

Ruge said that while he fought in a war to protect the country and has survived combat, now "the Maui County Council wants to tax me to death."

Tom Croly, who was testifying on behalf of himself Wednesday, said that although he expected the council to approve the property tax rates as is, he wanted to point out the imbalances in the rates.

For example, as a condominium owner who uses the property as a vacation rental, he pays the higher hotel rate of $9.15 per $1,000 of net taxable assessed valuation, while his neighbor who qualifies as a homeowner pays only $2.75.

With the new rates, Croly will be paying around $83 more per year while his neighbor will only pay $15 more, he said.

After the meeting, Croly said he was not complaining about his increase but wanted to show the "unsustainable disparity" between what a homeowner pays versus that of a property used for a short-term rental.

Farmer Terry Kristiansen, testifying via phone from Hana Council District Office, asked the council for a decrease in agriculture property tax rates "so farmers have a little bit easier time to provide food and crops for the people on the island of Maui."

Property tax rates for agriculture will rise from $6 to $6.05 per $1,000 of net taxable assessed valuation.

She said with her quarter-acre farm in East Maui it's been difficult to keep up with paying bills, hard enough that she needs a bed-and-breakfast operation to help bring in extra cash.

The property tax rates in the resolution approved Wednesday are attached to the council's proposed budget. It will come before the full council for first reading at 10 a.m. Tuesday in the eighth-floor Council Chambers of the Kalana O Maui building. A public hearing on the budget is scheduled for 9 a.m., also in the chambers.

Article first published May 23, 2013, by Melissa Tanji, Staff Writer, The Maui News,

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