Maui Council approves tax-rate hikes mostly lower than it originally proposed

from Grassroot Institute, June 7, 2025

The Maui County Council approved a mixed bag of fiscal 2026 property tax rates on Tuesday June 3, 2025, that were supported by Grassroot only because most of the rates were slightly lower than the Council’s first proposal.

Resolution 25-88, floor draft 2 slashes rates for some owner-occupied homes and bed and breakfasts, but it also includes higher tax rates for short-term rentals, non-owner occupied residential properties, time shares and hotels.

The rate changes will save Maui taxpayers about $9.5 million. But overall, Maui taxpayers will still see their tax bills go up in 2026 because of a combination of higher tax rates and assessments.

Mayor Richard Bissen’s original budget proposal included a minor rate reduction for some homeowners and held rates steady for other classes. During budget deliberations, the Council opted to increase the rates on many classes, but walked back some of the steepest increases in the resolution that passed Tuesday.

“The proposed reduction in the Council’s initially proposed higher rates are welcome news,” Grassroot policy analyst Jonathan Helton wrote in testimony. “But the Council should reevaluate property taxes after the budget season ends to promote economic growth and affordability for all Maui residents.”

To read Helton’s full testimony, click here.

In other county council news:

Grassroot's testimonies submitted since late May for consideration by the Hawai‘i and Maui county councils can be viewed here.

Meanwhile, at the state level:

Gov. Josh Green signed into law on May 29 the Grassroot-supported bill HB732, now Act 125 (2025), which increases the threshold for needing a Special Management Area major permit from $500,000 to $750,000, with inflation adjustments to automatically occur every five years.

Grassroot pointed out in its testimony on HB732 that the threshold had not been changed since 2011, and that an increase to keep up with inflation and higher construction costs was long overdue.

Unfortunately, the measure does not cover construction on parcels directly on shorelines, but still it's a welcome reform.

Elsewhere in the Grassroot universe

Media nationwide cite Grassroot on Hawaii's major new tax hike

Honolulu's KHON2 quoted Grassroot Policy Director Malia Hill in a May 27 newscast about the 0.75 percentage point increase in Hawaii's transient accommodations tax to 11%. Written by reporter Jill Kuramoto, it was headlined "Landmark climate fee becomes law: Vistors to help fund Hawai‘i's fight against climate change."

An updated version of that newscast, still with Hill's comments, appeared a few days later on KTLA5 in Los Angeles, headlined "Hawaii to begin charging new 'Green Fee' tourist tax: How much will it cost visitors?"

And then in a June 2 article in the online "surf and outdoors publication" The Interia, Hill's comments appeared again. That article was headlined "Hawaii to Levy Higher Taxes on Tourists."

To see what Hill said, click on any one of the three articles listed above.

Elsewhere on the mainland, mrcTV, a division of the Media Research Center, based in Virginia, cited a March 23 column in Hawaii Filipino Chronicle by Grassroot President Keli‘i Akina regarding what was then just a proposed TAT increase.

Headlined "Aloha? Hawaii Imposes First US 'Climate Fee' on Tourists," the June 3 mrcTV article by writer P. Gardner Goldsmith stated: "In March, the Grassroot Institute of Hawaii warned that this tax will be disastrous, hurting tourism and the local economy. They’re right. When government penalizes people for visiting, it risks driving them to freer, less-taxed destinations."

And in a May 27 Courthouse News Service article headlined "Hawaii to become first state to charge visitors a 'climate fee,'" reporter Jeremy Yurow referred to Grassroot testimony that warned a prospective increase in the state TAT could harm both the local tourism industry and Hawaii residents who travel interisland for medical or other unexpected reasons, or who are "simply seeking to enjoy a 'staycation.'"

Great wrap-up of Grassroot's legislative wrap-up event on Maui

Maui Now reporter Brian Perry wrote an excellent, comprehensive article about Grassroot's recent 2025 legislative wrap-up event on Maui. Headlined "Grassroot Institute reviews legislative session, citing wins on permitting, tax hikes," the May 26 article stated that "the institute’s overview was through the lens of the nonprofit policy research organization’s mission to educate people about the principles of individual liberty, economic freedom and limited, accountable government. Grassroot held similar events on Hawaii Island, Kauai and Oahu.

Grassroot research concerning historic review process

In a commentary headlined "Historic Preservationists Urge Governor to Veto Bills," Honolulu Civil Beat columnist Kirstin Downey cited Grassroot's research documenting how long it can take for historic reviews to be completed, which adds to the time and cost of building new homes.