Roth Proposes Tax Reductions in Final Budget Proposal

If approved by the County Council, Hawai‘i County Mayor Mitch Roth’s final budget for the next fiscal year would reduce taxes for nearly all real property tax classes.

Roth submitted his final budget Thursday afternoon, May 5, to the Council. The budget proposal reflects an $89.8 million increase from his draft budget submitted in March.

The increase is because of grant revenue and includes funding to tackle some of Roth’s priority initiatives such as affordable housing, sustainability and homelessness. Other reasons for the increase include employee fringe benefits and a drastic hike in utility costs.

“We have seen our residents and on-island businesses struggle through the pandemic, and we are committed to doing all we can to ensure they bounce back stronger than ever,” Roth said in a press release. “Our communities have been more resilient because of the work of our small businesses, who never once wavered, and providing them a small reduction in real property tax in the coming fiscal year is the least we can do to help them recover cost from a rough two years. We hope the Council will agree with our suggested rates and join us in uplifting those who have uplifted us.”

The proposed tax rate changes reflect an almost across-the-board reduction. Roth’s final budget includes the following changes in each tax class, per $1,000:

• Affordable Rental: From $6.15 to $6.10.
• Residential: No change proposed.
• Residential Tier Two: From $13.60 to $13.50.
• Apartment: From $11.70 to $11.10.
• Commercial: From $10.70 to $10.50.
• Industrial: From $10.70 to $10.50.
• Agriculture: From $9.35 to $9.10.
• Conservation: From $11.55 to $11.10.
• Hotel and Resort: From $11.55 to $11.10.
• Homeowners: From $6.15 to $6.10.

The residential rate is the only rate proposed to remain unchanged. That classification consists primarily of second homes and investment properties and includes many short-term vacation rentals.

“While setting these rates, we kept in mind the impact these rate reductions could have on our federal funding,” the mayor’s press release said. “The rate reductions are justified, as they are offset by the increase in real property tax values.”

The proposed budget also includes needed improvements such as a new engine for the fire department’s helicopter, adding positions to provide better and more responsive services and improving the reliability and safety of critical county systems and data. Roth’s administration is also committed to innovative solutions, such as converting the county fleet to hybrid and clean energy vehicles, taking care of facilities and parks and increasing grant funding for recycling.

“This proposed budget represents our departments’ best efforts to meet our residents’ needs quickly and responsibly while striving to maintain the level of services our residents deserve,” Roth said in the release.