Time-share owners are hit hardest; owner occupants bear a lesser increase

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Narrow council vote raises Maui property tax rates in fiscal 2018

by Melissa Tanji at Maui News | Published May 13, 2017

The Maui County Council narrowly approved a property tax rate resolution on Friday for fiscal 2018, which begins July 1.

The tax hikes affect all tax categories, with time-share owners getting the highest increase and homeowners the lowest.

The rates for time shares go from $14.31 per $1,000 of net taxable assessed valuation to $15.43, or a $1.12 hike, and homeowners will see an increase from $2.70 to $2.86, for a 16-cent hike.

The new rates are expected to generate nearly $303.2 million for fiscal 2018.

Council members voting in support of the higher rates were Council Chairman Mike White, Vice Chairman Bob Carroll and members Stacy Crivello, Riki Hokama, Kelly King and Yuki Lei Sugimura.

Those opposed were Elle Cochran, Alika Atay and Don Guzman.

Cochran said she voted against the rates because she had wanted a $1 more of an increase to the hotel and resort category, which would go from the council proposed $9.37 per $1,000 of net taxable assessed valuation to $10.37. Currently, the rate is $8.71.

Cochran explained her opposition to the proposed rates. If amendments had been made to the property tax resolution Friday, a new public hearing would have to be held on the matter. Cochran did not make a motion to amend the rates.

Cochran said that adding a $1 to the tax rate for hotel and resort properties could generate $10 million more for the county. She would apply the additional money to a Wailea ladder firetruck and the Police Department, as well as the county's unfunded liabilities. But a chunk of the money, or around $9 million, could go toward helping with the Front Street Apartments because a tax loophole could displace residents who now rent at affordable rates.

Cochran said her increase for hotel and resorts "wouldn't be that much of a hardship to visitors or anyone."

She added that Maui has lower property tax rates for hotels and resorts than Oahu, where the rate is $12.90 per $1,000 of net taxable assessed valuation.

Atay and Guzman did not say on the floor why they opposed the motion to approve the tax rates.

Lisa Paulson, executive director of the Maui Hotel and Lodging Association, said during public testimony that the organization wanted a "more equitable tax structure to be considered."

She said that hotels, resorts and time-share properties have the two highest property tax rates in the county, adding that "higher taxes can hurt our industry and our employees."

Higher taxes can affect a hotel's ability to do renovations and its ability to give back to the community, she said.

She pointed out that 40 percent of Maui county's workforce is in the tourist industry.

Hotels put on job fairs for the workers who lost their jobs at the now closed Hawaiian Commercial & Sugar Co., and they assisted displaced workers from the Makena Beach & Golf Resort, also closed.

Hotels provide job-shadowing resources and funds for hospitality academies at Maui, Baldwin and Lahainaluna high schools, Paulson said. And, the visitor industry, through its annual Visitor Industry Charity walk, scheduled for today on Maui, raised $1.1 million last year for more than 100 nonprofit organizations, she said.

"We believe in investing in our community, our environment and employees," Paulson said.

Overall, Hokama, the Budget and Finance Committee chairman, defended the tax rates.

"Again there are people (who feel) we need to adjust," he said. "I believe we did a good as job as possible."

Hokama added: "As long as the community is willing to pay, the council tries to provide."

If the council wants to look at additional revenues, it should look at the categories the county subsidizes such as the agricultural and residential categories, he said.

The county subsidizes $30 million in the agricultural category and more than $10 million in the residential category.

Here are the council's approved property tax rates for fiscal 2018:

• Homeowner: $2.86 (approved), $2.70 (current).

• Residential: $5.54, $5.30.

• Apartment: $6.32, $6.

• Commercial: $7.28, $6.60.

• Commercial residential: $4.56, $4.35.

• Industrial: $7.49, $6.69.

• Agricultural: $6.01, $5.66.

• Conservation: $6.37, $5.80.

• Hotel and resort: $9.37, $8.71.

• Time share: $15.43, $14.31.

The rates are multiplied by each $1,000 of net taxable assessed valuation for properties.

* Melissa Tanji can be reached at mtanji@mauinews.com.

 


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