Just confirming what I reported earlier, I could not hear any of the testifiers or remote council members, except when CM Sugimura first talked. I could hear Chair Lee and the other speakers in chambers. Never had this issue before.
I am not available tomorrow because I must chair on all day meeting of the PPT BOR .
Tom Croly should not be a resource to this committee. He has too much personal interest. He successfully lowered his personal property's tax rate by lobbying the council and claiming he didn't have fairness. Tax policy is not about fairness. It's about policy! Prior councils purposely kept the B&B rates high to discourage them. I would not want a B&B next to my residence. Yes, tax them high! It's a business! A business that affects the residential nature of local neighborhoods. He claims it's the same as home offices--baloney.
Lastly, he joined the appeal board to gain insider information and then quit mid-term so he could start a tax consulting business. Red flags all around.
Bill 110
Ending the eligibility to qualify for this program is fiscally sound, but this measure should be examined in consideration of the objectives of this program.
Bill 111
I love the goal of the Circuit Breaker ordinance, to make certain that real property tax will not cause someone who is income challenged from losing their home to an excessive Real Property tax burden. The key is making sure this program is serving those intended and is not allowed to be abused by those who could manipulate their annual income to make use of it when they are actually not in need. I think the director’s proposal is warranted because it can be challenging for some seniors to even meet the statutory documentation needed to qualify and this would unburden them, and the staff in may cases. However, I would suggest putting in an additional restriction besides age to qualify for this simplified application process, and that would be the amount of the Circuit breaker credit.
Since the average circuit breaker credit is less than $1000, I might suggest adding a requirement that the credit be lass than $2000 to qualify for this simplified application process. For the 2025/26 fiscal year, additional provision would exclude 18 properties from this simplified application process.
Bill113
This measure is an attempt to address the larger problem of incorrect classification suffering as much as an 18 month delay in being rectified either because of missing a filing deadline or because of a change of use during the tax year. I believe this measure fails in addressing these issues and makes things even more complicated. While these issues deserve the greatest consideration by this committee, I do not support this approach and would like the committee to explore other solutions to addressing these issues
The tax amounts shown below show how much difference in tax bill there can be between the same valued property being classified in the various classifications. And some properties are miss-classified for up your 18 months.
$600,000 assessment
Owner occupied w/Long term rental $330
Owner Occupied($300k exemption) $495
Long Term Rental($200k Exemption) $1,180
Non Owner Occupied. $3,522
STR/TVR. $7,500
$1,000,000 assessment
Owner occupied w/Long term rental $990
Owner Occupied($300k exemption) $1,155
Long Term Rental($200k Exemption) $2,360
Non Owner Occupied. $5,870
STR/TVR. $12,500
$2,000,000 assessment
Owner occupied w/Long term rental $2,685
Owner Occupied($300k exemption) $2,865
Long Term Rental($200k Exemption) $6335
Non Owner Occupied. $14,470
STR/TVR. $26,500
$5,000,000 assessment
Owner occupied w/Long term rental $8,480
Owner Occupied($300k exemption) $9,055
Long Term Rental($200k Exemption) $11,450
Non Owner Occupied. $57,070
STR/TVR. $71,600
Bill114
I support this measure to provide clarity in the code as to the taxation of these leased lands
Mahalo for undertaking this important but complex project. You may not get it all done in one fiscal year, but that’s alright.
I want to give you some of my comments in writing, before your first meeting Wednesday afternoon. I think you all know, but for the record, I am currently Chair of the RPT BOR, and during the three years I was Chair of the COGC, we investigated RPT policy options and produced a formal report of our findings and recommendations on policy options for consideration exactly 3 years ago. Evan Dust was a commissioner then and provided valuable amendments and edits to the final product, which the COGC approved unanimously. It is a huge document, with all the exhibits, but readily available on the COGC website.
Here are my comments on the four bills on the agenda.
110 This caps eligibility for Aina Kupuna relief as of 12/31/45. Good idea.
111 This relaxes documentation requirements for Circuit Breaker for owners >77 yrs old. Good idea.
(No 112, unexplained)
113 This proposal relaxes deadlines for claiming OO or LTR classification and exemptions, on a new deadline of 9/30. Why not make it a requirement of filing an appeal by April 9, and to submit the new documents by May 15? The late filing penalties are ok, but probably need input from the public and other prior BOR members. But no need to give the neglectful owner more time than May 15 to qualify. Qualification depends in both instances on documents already in existence by 12/31 of the prior year. Also, Tom Croly in his written submission acknowledges the problem, a surprising increase in taxes due, in the notice the PO gets in mid-March. They are upset when they learn they would qualify for lower taxes if they had filed on time. In the two years of appeals I’ve heard, this is a frequent basis for appeal. These surprised owners file an appeal by April 9, or they talk to their assessor and learn that no such appeal can be granted, neither by RPAD or BOR. Tom proposes that the BOR be given discretion to grant relief. But not all of those affected file appeals. How late would the BOR be able to extend the deadline, and for what excuses for the late filings? Clear rules would be better.
114 Extends RPT exemption to lessees on DHHL parcels with improvements. Good idea.
I have two additional topics for you to consider:
The first is that with the invaluable assistance of Marcy Martin and Kari Stockwell, and their team of statistical policy analysts, Maui Tomorrow has hired a consultant to produce a tool you and the administration, and anyone else, can use to see the RPT revenue effects of any hypothetical changes to the two tier thresholds in each class of property, and at the same time, see the effect of any hypothetical rate changes for each tier. The new revenue results of the hypothetical new tiers and rates are available instantaneously.
This tool will use only data from RPAD already publicly available.
The second is that I believe one of the issues you must deal with is whether to continue the large discrepancy between how vacant land, with no structures, is taxed in the Lahaina burn zone and parcels only a half mile away in Launiupoko, or just north and mauka of the burn zone. Many of the vacant parcels in the burn zone, had their land separately assessed at more than $2 million before the fire. This topic merits a long discussion, but if you want RPAD to assess the currently exempt lots, the sooner they know the better.
I am happy to discuss all of this with you if I can be of help.
Aloha.
Michael Williams
Just confirming what I reported earlier, I could not hear any of the testifiers or remote council members, except when CM Sugimura first talked. I could hear Chair Lee and the other speakers in chambers. Never had this issue before.
I am not available tomorrow because I must chair on all day meeting of the PPT BOR .
Tom Croly should not be a resource to this committee. He has too much personal interest. He successfully lowered his personal property's tax rate by lobbying the council and claiming he didn't have fairness. Tax policy is not about fairness. It's about policy! Prior councils purposely kept the B&B rates high to discourage them. I would not want a B&B next to my residence. Yes, tax them high! It's a business! A business that affects the residential nature of local neighborhoods. He claims it's the same as home offices--baloney.
Lastly, he joined the appeal board to gain insider information and then quit mid-term so he could start a tax consulting business. Red flags all around.
RPT reform committee testimony
Bill 110
Ending the eligibility to qualify for this program is fiscally sound, but this measure should be examined in consideration of the objectives of this program.
Bill 111
I love the goal of the Circuit Breaker ordinance, to make certain that real property tax will not cause someone who is income challenged from losing their home to an excessive Real Property tax burden. The key is making sure this program is serving those intended and is not allowed to be abused by those who could manipulate their annual income to make use of it when they are actually not in need. I think the director’s proposal is warranted because it can be challenging for some seniors to even meet the statutory documentation needed to qualify and this would unburden them, and the staff in may cases. However, I would suggest putting in an additional restriction besides age to qualify for this simplified application process, and that would be the amount of the Circuit breaker credit.
Since the average circuit breaker credit is less than $1000, I might suggest adding a requirement that the credit be lass than $2000 to qualify for this simplified application process. For the 2025/26 fiscal year, additional provision would exclude 18 properties from this simplified application process.
Bill113
This measure is an attempt to address the larger problem of incorrect classification suffering as much as an 18 month delay in being rectified either because of missing a filing deadline or because of a change of use during the tax year. I believe this measure fails in addressing these issues and makes things even more complicated. While these issues deserve the greatest consideration by this committee, I do not support this approach and would like the committee to explore other solutions to addressing these issues
The tax amounts shown below show how much difference in tax bill there can be between the same valued property being classified in the various classifications. And some properties are miss-classified for up your 18 months.
$600,000 assessment
Owner occupied w/Long term rental $330
Owner Occupied($300k exemption) $495
Long Term Rental($200k Exemption) $1,180
Non Owner Occupied. $3,522
STR/TVR. $7,500
$1,000,000 assessment
Owner occupied w/Long term rental $990
Owner Occupied($300k exemption) $1,155
Long Term Rental($200k Exemption) $2,360
Non Owner Occupied. $5,870
STR/TVR. $12,500
$2,000,000 assessment
Owner occupied w/Long term rental $2,685
Owner Occupied($300k exemption) $2,865
Long Term Rental($200k Exemption) $6335
Non Owner Occupied. $14,470
STR/TVR. $26,500
$5,000,000 assessment
Owner occupied w/Long term rental $8,480
Owner Occupied($300k exemption) $9,055
Long Term Rental($200k Exemption) $11,450
Non Owner Occupied. $57,070
STR/TVR. $71,600
Bill114
I support this measure to provide clarity in the code as to the taxation of these leased lands
Please see attached.
Aloha kakou.
Mahalo for undertaking this important but complex project. You may not get it all done in one fiscal year, but that’s alright.
I want to give you some of my comments in writing, before your first meeting Wednesday afternoon. I think you all know, but for the record, I am currently Chair of the RPT BOR, and during the three years I was Chair of the COGC, we investigated RPT policy options and produced a formal report of our findings and recommendations on policy options for consideration exactly 3 years ago. Evan Dust was a commissioner then and provided valuable amendments and edits to the final product, which the COGC approved unanimously. It is a huge document, with all the exhibits, but readily available on the COGC website.
Here are my comments on the four bills on the agenda.
110 This caps eligibility for Aina Kupuna relief as of 12/31/45. Good idea.
111 This relaxes documentation requirements for Circuit Breaker for owners >77 yrs old. Good idea.
(No 112, unexplained)
113 This proposal relaxes deadlines for claiming OO or LTR classification and exemptions, on a new deadline of 9/30. Why not make it a requirement of filing an appeal by April 9, and to submit the new documents by May 15? The late filing penalties are ok, but probably need input from the public and other prior BOR members. But no need to give the neglectful owner more time than May 15 to qualify. Qualification depends in both instances on documents already in existence by 12/31 of the prior year. Also, Tom Croly in his written submission acknowledges the problem, a surprising increase in taxes due, in the notice the PO gets in mid-March. They are upset when they learn they would qualify for lower taxes if they had filed on time. In the two years of appeals I’ve heard, this is a frequent basis for appeal. These surprised owners file an appeal by April 9, or they talk to their assessor and learn that no such appeal can be granted, neither by RPAD or BOR. Tom proposes that the BOR be given discretion to grant relief. But not all of those affected file appeals. How late would the BOR be able to extend the deadline, and for what excuses for the late filings? Clear rules would be better.
114 Extends RPT exemption to lessees on DHHL parcels with improvements. Good idea.
I have two additional topics for you to consider:
The first is that with the invaluable assistance of Marcy Martin and Kari Stockwell, and their team of statistical policy analysts, Maui Tomorrow has hired a consultant to produce a tool you and the administration, and anyone else, can use to see the RPT revenue effects of any hypothetical changes to the two tier thresholds in each class of property, and at the same time, see the effect of any hypothetical rate changes for each tier. The new revenue results of the hypothetical new tiers and rates are available instantaneously.
This tool will use only data from RPAD already publicly available.
The second is that I believe one of the issues you must deal with is whether to continue the large discrepancy between how vacant land, with no structures, is taxed in the Lahaina burn zone and parcels only a half mile away in Launiupoko, or just north and mauka of the burn zone. Many of the vacant parcels in the burn zone, had their land separately assessed at more than $2 million before the fire. This topic merits a long discussion, but if you want RPAD to assess the currently exempt lots, the sooner they know the better.
I am happy to discuss all of this with you if I can be of help.
Aloha.
Michael Williams