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Thursday, November 2, 2023
Maui Fires: Three bills offer property tax relief
By Grassroot Institute @ 3:56 AM :: 1515 Views :: Maui County, Tax Credits, Taxes

Maui Council decides to blend three property tax relief measures

The Grassroot Institute's Jonathan Helton testified that all three of the bills were good but also that they all needed improvement

from Grassroot Institute

The Maui County Council decided on Tuesday to consolidate into one measure three separate bills that sought to provide tax relief to Maui property owners affected by the Aug. 8 Maui wildfires.

In written and oral testimony presented to the Council, Grassroot Institute of Hawaii policy researcher Jonathan Helton said all three of the bills were good, but Bill 102 was the best because it provided tax relief to all properties — not just homes — and it extended relief for the longest period of time.

Helton recommended that all those provisions be in whichever of the three bills the Council moves forward.

He said property owners who lost their homes or businesses should not have to fear that they could lose their lands to foreclosure because they couldn’t pay their property taxes.

The three bills discussed were:

>> Bill 91 (2023), which would have granted tax relief in fiscal 2025 and possibly fiscal 2026 to owners of properties destroyed or damaged by the fires.

>> Bill 95 (2023), which would have exempted from the property tax in fiscal years 2024 and 2025 all residential properties in the Lahaina burn zone and residential properties that were damaged or destroyed in Upcountry and Kihei. It also would have provided tax relief to hotels and short-term rentals that have been offering shelter to residents displaced by the fires.

>> Bill 102 (2023), which would have extended tax relief to properties that were destroyed or damaged by the fires, from the second half of fiscal 2024 through the first half of fiscal 2027.

County administration officials told the Council that the new consolidated bill likely could be ready for hearing later this month.

To see Helton’s oral testimony, go here.

  *   *   *   *   *

Bill 102 best of three bills but should be retroactive

from Grassroot Institute, Oct 31, 2023

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on Oct. 31, 2023.
_____________

Oct. 31, 2023, 9 a.m.
Maui County Council Chamber
Budget, Finance and Economic Development Committee

Comments on Bill 102 (2023)

Aloha Chair Sugimura and Vice-Chair Kama, 

Thank you for considering Bill 102 (2023), which would exempt from Maui County’s real property tax all real property damaged or destroyed by the August 2023 wildfires and deemed uninhabitable or unsafe. 

Mayor Richard Bissen’s waiver of fiscal 2024 property taxes applied only to improved structures “completely destroyed” in Lahaina, Upcountry and Kihei. This waiver did not help the many owners whose properties were damaged in the fires, but they are equally deserving of tax relief, since their buildings may not be inhabitable or in a condition that is safe to use for business purposes.

Bill 102’s exemption would run from Jan. 1, 2024, through Jan. 1, 2027, and would apply to delinquent taxes and penalties as well as actual property tax bills. 

The property tax waiver would terminate if the property were to be sold between the bill’s enactment and its expiration.

Many of the homeowners and businesses that would be affected by this bill will not have significant earnings for the foreseeable future, so they will be unable to afford their property tax payments. People in this tragic situation should not face the possibility of losing their properties to foreclosure because they could not pay their taxes. 

The Grassroot Institute of Hawaii believes this measure would be a good way to provide relief to property owners affected by the wildfires. It should be the preferred vehicle for fire-related tax relief because it provides business owners tax relief and runs for a longer period than Bill 91.

However, the Institute does recommend that a provision be added that would allow owners of damaged properties to claim retroactive tax relief for the first half of fiscal year 2024, i.e., the taxes that were due Aug. 20, 2023.

The County would stand to lose several million in revenues, but this would not handicap its ability to perform core functions. The mayor’s previous waiver cost the County just $19 million — less than 2% of its $1.07 billion fiscal 2024 budget.

Further, whatever revenue loss this bill might cause might be offset by federal and state disaster assistance to the County. 

However, regardless of the revenue implications, the County should help people keep their properties as they wait for cleanup and insurance payments to allow rebuilding. 

Thank you for the opportunity to testify.

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

  *   *   *   *    *

Broaden property tax relief for Maui wildfire victims

from Grassroot Institute, Oct 31, 2023

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on Oct. 31, 2023.
_____________

Oct. 31, 2023, 9 a.m.
Maui County Council Chamber
Budget, Finance and Economic Development Committee

Comments on Bill 95 (2023)

Aloha Chair Sugimura and Vice-Chair Kama, 

Thank you for considering Bill 95 (2023), which would exempt from the Maui County property tax all residential real property in Lahaina and other residential real property that was damaged or destroyed by the fires in Kihei and Upcountry. 

It would also provide tax relief to hotel and short-term rental owners who use their properties to provide shelter to residents displaced by the fires. These exemptions and relief programs would cover fiscal years 2024 and 2025. 

Mayor Richard Bissen’s waiver of fiscal 2024 property taxes applied only to improved structures “completely destroyed” in Lahaina, Upcountry and Kihei. This waiver did not help the many owners whose properties were damaged in the fires, but they are equally deserving of tax relief, since their buildings may not be inhabitable or in a condition that is safe to use for business purposes.

The Grassroot Institute of Hawaii believes providing property tax relief to residents affected by the wildfires is a good way to help residents recover. However, rather than approve Bill 95, Bill 102 would be the better option because Bill 95 does not provide tax relief to business owners. 

Many of Lahaina’s business owners lost all their sources of income to the wildfires, and like the home and rental owners in the area, they too are at risk of losing their lands to foreclosure for nonpayment of taxes. Please consider bringing these Lahaina-area business owners under the County’s tax-relief umbrella. 

Thank you for the opportunity to testify.

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

  *   *   *   *   *

More time might be needed if homes still uninhabitable

from Grassroot Institute, Oct 31, 2023

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Maui County Council on Oct. 31, 2023.
_____________

Oct. 31, 2023, 9 a.m.
Maui County Council Chamber
Budget, Finance and Economic Development Committee

Comments on Bill 91 (2023)

Aloha Chair Sugimura and Vice-Chair Kama, 

Thank you for considering Bill 91 (2023), which would exempt from Maui County’s real property tax all real property damaged or destroyed by the August 2023 wildfires and deemed uninhabitable.

This exemption would apply to fiscal year 2025 and allow property owners to extend the exemption an additional year if their properties were still considered to be uninhabitable.

Mayor Richard Bissen’s waiver of fiscal 2024 property taxes applied only to improved structures “completely destroyed” in Lahaina, Upcountry and Kihei. This waiver did not help the many owners whose properties were damaged in the fires, but they are equally deserving of tax relief, since their buildings may not be inhabitable or in a condition that is safe to use for business purposes.

The Grassroot Institute of Hawaii believes providing property tax relief to residents affected by the wildfires is a good way to help residents recover. However, rather than adopt Bill 91, Bill 102 should be the preferred option because Bill 91 applies to only fiscal 2025 — and possibly to 2026 — while Bill 102 applies to the second half of fiscal 2024 through the first half of fiscal 2027. 

Rebuilding Lahaina will likely take several years, so this property tax waiver should offer existing residents and businesses the maximum degree of tax relief possible to protect them from foreclosure. 

Thank you for the opportunity to testify.

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

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