INDEX - KAUAI HOUSING
SUBJECT: PROPERTY TAX REFORM
SOURCE: RAY CHUAN email@example.com
The Great Property Tax Heist
3 October 2005 - 1:45pm
The Great Train Robbery, produced by American director Edwin Porter in 1903
The Great Heist
by Ray Chuan 2 October 2005
Kauai property owners could have benefited, as far back as 2003, from a capping of the property assessments (valuation) back to 2001, thereby avoiding the punishing rises imposed on property owners just because some other people had sold their properties at the rapidly rising market prices. This capping of the assessed valuation (as California and most Mainland states had voted for in the seventies and eighties) was the core of a Draft Bill #2058 crafted by then Council Chair Ron Kouchi in September, 2002. In the November Elections that year Kouchi lost to Batiste in the mayoralty race; and was out of political office.
However, Draft Bill #2058, still bearing Kouchi’s name as the introducer as well as the draft bill number, was passed by a vote of 7 to 0 of the Council, now chaired by Kaipo Asing, on December 19, 2002; and signed by the new mayor on December 23, 2002; thus becoming Ordinance No. 799.
But, there is one big problem. The contents of Draft Bill 2058 that went to public hearing (after the original Draft Bill 2058 went to its First Reading) and subsequently Second Reading and passage, were altogether different from what Kouchi introduced to the Council on September 26, 2002! Changing the contents of a bill without the proper amendment is patently illegal. Council Chair Asing rushed the whole process so fast through the Council that most people thought Ordinance 799 was meant to cap the assessed valuation of real property (such as was done
in California in 1977 through Proposition 13 and followed thence by most states); when in fact this bogus bill that was passed was a property tax based on income – or an income tax somehow magically turned into a property tax by that master magician Kaipo Asing.
This purloining of a legitimate property tax bill and turning it into a form of income tax was just the beginning of a mish-mash of so-called property tax relief measures to come out of this Council under the leadership of Kaipo Asing since December, 2002. At the last Council meeting of September 29 there were no less than SEVEN property tax bills!!
The only two tax measures that would have capped either the ASSESSMENT (proposed by the Real Property Tax Task Force appointed by the Mayor and the Council) or the TAX (passed by an overwhelming majority of the voters through a Charter amendment) are such anathema to this Council that it is suing the public for the Charter amendment and totally ignoring the Tax Force plan.
IN THE MEAN TIME this Council has successfully increased its property tax revenue from around $40 million in 2001 to $65 million in 2005.
Members of the Task Force at least can take comfort in the Certificate of Appreciation they each received from the Council. The long suffering tax paying
public, unfortunately, can look forward to the mounting legal bills incurred by the lawsuit filed by the Council. The cruelest blow on the public, however, is the constant harping by Council Chair Asing that the public is costing the County hundreds of thousands of dollars in legal fees. The ultimate insult, of course, is that these hundreds of thousands of dollars have been extracted and continue to be
extracted from the public through the property tax!
The only relief is to get rid of these bandits at the next elections!
SUBJECT: PROPERTY TAX REFORM
SOURCE: RAY CHUAN firstname.lastname@example.org
More on County Government Machinations
25 September 2005 - 11:00am
an example of "Smoke & Mirrors" from www.prairieghosts.com/smoke.html
Smoke and Mirrors
by Ray Chuan 24 September 2005
The Council and some of its members seem to be determined to keep muddling the water with respect to the property tax issue, piling one bill over another, and all the time assuring the public that these are temporary measures until the Task Force Plan is adopted. The whole scheme is nothing but smoke and mirrors, meant primarily to look good before the public in anticipation of an early start in the campaign to get re-elected.
The most ludicrous of the host of tax bills has to be the one introduced by JoAnn Yukimura for the benefit of her friend Ito who wants to have his cake and eat it too.
Walter Lewis, who also testified on her Draft Bill 2144, had the best answer to JoAnn’s question asking what Walter would propose to remedy the faults with her bill: “I would leave that to the learned Council.” Touche’ ! Hers and the other “Tax Obfuscation Bills” will come up before the Council Committees next Thursday. I sort of jumped the gun on my commentary to JoAnn’s bill by writing a letter to the Garden Island, which published it on Sept 14, a week before the bill came to the public hearing on Sept 22. Here is that Sept 14 letter:
“At the September 8 meeting of the County Council a very interesting tax relief bill was introduced by Councilmember JoAnn Yukimura – Draft Bill No. 2144 – which purports to reward the owner of a single residence home (that does not qualify for any exemptions) with a 30% discount on the property tax if the owner agrees not to sell it for ten years. Nothing is said on the use of the property, which opens up
some interesting features.
If you look up the assessment records of most, if not all vacation rentals you’ll find that no exemptions are taken, so these properties are assessed at around $1 million and more, with a resulting property tax generally of around $4,000 and more. There appears to be no dispute that “vacation rental” is a commercial activity, yet our Council members steadfastly refuse to recognize this bit of reality. Otherwise, the property tax would be doubled. One can only surmise that our Council members believe that the use of residential property for vacation rental accrues to some public benefit and therefore deserves the lower property tax.
Under Bill 2144 the owner of vacation rental property can be further rewarded with a 30% discount on the property tax – with the result that what logically would be a property tax of $8,000 would first be reduced to $4,000 by not recognizing its
commercial use; and, under Bill 2144, reduced to $2,800 if the property owner promises not to sell it for ten years. After all, why would anyone want to sell when such a good deal is offered by the government?
Now, let’s hear from the County Council what great public benefits accrue from vacation rentals to warrant a 65% reduction (from $8,000 to $2,800) in the property tax?”
This letter elicited a response from a property owner on the North Shore who explained that she had to vacation rent her property in order to pay the
ever-rising property tax, to which I wrote the following letter published in the Garden Island today (Sept 24):
“In her letter in the Garden Island of September 19 Ms Larsen is perfectly correct in the way she described the plight she is caught in. The people California recognized this same problem and passed Proposition 13 in 1977 which capped the assessment of the value of real property at the value it had in 1975, with provision for inflationary rise of up to 2% per year.
This is exactly what the Real Property Task Force (appointed by the Mayor and the County Council) recommended in its final plan submitted to the Council almost two years ago. That plan died under the cloud of numerous tax relief bills concocted by the Council since then, not only to confuse the public but, primarily, to allow this County Government to continue to exact an ever-increasing property tax revenue from the public – from $85 million in fiscal 2001 to $122 million in this new fiscal year – a rise of 44% in five years!
In fact, there are before the Council at this moment no less than FIVE new tax “relief” bills, which are in reality “tax obfuscation bills”, including the one I commented upon (TGI Sept 14) that would give Ms Larsen at least a 30% relief, whereas the Ohana Kauai Charter Amendment and the Task Force Plan would have kept her tax at only a few percent higher than its value back in 1997 or 2000.
When you own some stock its value changes from day to day and year to year; but you only pay a gain tax when you sell it and make a profit. In California and most other states the government treats real property the same way. Your property’s value (its assessment) only changes upon a sale, so if you don’t sell, your base value doesn’t change. The honest among governments, at state and lower levels, raise the property tax revenue, when they really need the rise and tell the people honestly about it, by raising the TAX RATE.
This is what is meant by the term TRANSPARENCY, which is something this county will do anything, including suing the taxpayers, to avoid.
Multiplying the assessment by the rate yields the tax, which, by the way, our county government never tells you. You get an assessment notice in March; and
a tax bill in August which doesn’t explain the relationship between the two documents. As far as I know, we are the only government that does not tell the property owners this relationship between these two notices.
The plight faced by Ms Larsen and thousands of others on this island (which, by the way, has the highest per capita tax compared to the other islands) will only come when the county would cap the assessment at some value before the sharp rise in the real estate market.”
Capping the assessment is, of course, what this County government would never do! It will continue to leave the public in the dark about the relationship between the property tax and the property value assessment.
The very modest proposal of the Property Tax Task Force that the tax statement that goes to the taxpayer in August and March should show this relationship, as
it is done in all jurisdictions on the Mainland, was summarily ignored, of course, by the Council.
After all, TRANSPARENCY is absolute anathema to the Kauai County Government. OPACITY is the governing word, which is one of the reasons Walter Lewis and I have challenged the County and are ready to take the Council to court for its “willful violations” of the Sunshine Law. This is likely to be a lengthy process that will stretch into next year, possibly beyond the next General Elections. The frequent references to this lawsuit by the media should pique the public’s interest as we head for November, 2006.
It is interesting to note that members of the Council, in their campaign to polish their public image, aside from their high profile property tax relief efforts, have found another gimmick which may surprise you.
In the published agenda for the Council Committee meeting of September 29, five of them – Asing, Furfaro, Kaneshiro, Rapozo and Yukimura – announce their potential conflicts of interest on Tax Bills 2142, 2144, 2145, 2146, 2147 and 2148 because they own real property in the County of Kauai. Does that mean they won’t participate in deliberations on or vote on these bills? No, not at all! Their own rules require that they publicly disclose any possible conflicts of interest with respect to any deliberations and decision making on any legislation – period! Do these disclosures prohibit them from participating in deliberating or voting on these bills? Absolutely not! So what is the point of beating their chests to show their moral-politico purity?
To add more smoke and mirrors on these Madison Avenue tax bills, I guess. Very clever! But how come Council members Isero-Carvalho and Tokioka are not beating their chests?
For any answer to this puzzle I suppose I should quote Walter Lewis: “I would leave that to the learned Council.”
SUBJECT: PROPERTY TAX REFORM
SOURCE: RAY CHUAN email@example.com
More on County Government Machinations
15 September 2005 - 8:45pm
Inn Paradise Kauai vacation rentals on the Coconut Coast
Interesting tax bill and more violations of the Sunshine Law
by Ray Chuan on September 11, 2005
There’s an important meeting of the Police Commission on Wednesday, Sept 14, at 2 p.m., at which the matter of the over-budget spending in the Police Dept will be taken up, again. This is a continuation of the ongoing attempt on the part of the Mayor, the Council and the Finance Dept, to get rid of the Police Chief.
While it may seem ironic that this Dump Chief Lum campaign should be reaching a crescendo just as the Garden Island has been running a series of articles on the impressive record of drug busting by the Police Dept, compared to the dismal record of the past, before the current chief took office, an understanding of the local political culture of deep-seated anti-non Kauaians on the Police Force will explain a lot. If you are not from a local family (with a Portuguese or Japanese or Hawaiian name) and not born on Kauai you would have a hard time being on the Police Force. The last administration, under Kusaka, worked hard to get rid of Chief Bob Freitas, even though he has a Portuguese name, is from Hawaii, but had most of his professional experience on the Mainland. For years the Kauai Police Dept has had around fifteen vacancies in the officers’ rank, in large part because the department would not recruit from the Mainland, while Oahu and the other islands do recruit actively from “America.” Partly because of the high vacancy rate the short-handed force quite often has to work overtime, incurring overtime charges, which is nothing unusual, but in this instance has provided the Administration and the Council with the excuse to try to get rid of the current chief who is not from this island, has no extended ohana here, and basically has been raised in a cosmopolitan 20th Century culture.
Horrors! That makes him a de facto Haole! What’s more, the chief has the temerity to file charges against the County before the Federal Civil Rights Commission over the racial slander used against him by one of the current sitting Police Commissioners – in the widely circulated e-mail slander of Chief Lum with the “Hop Sing” appellation. And, don’t leave out the scourge of nepotism that runs deep within this county government. The Finance Director, who is seen as an important part of this Get Rid of Lum campaign, rarely gets into political intrigues involving the Council, except that in the current instance his ohana-relationship with the Council seems to come into play.
So Chief Lum, who is strongly supported by the younger staff and has no doubt earned the ire of the criminal elements with his stellar performance in drug busting, is in a tough spot. Under the current County Charter, as it is almost universally in all political jurisdictions, the Police Commission hires and fires the Police Chief. Guess what the Administration is proposing to the Charter Review Commission? Give the Mayor, not the Police Commission, the power to hire and fire the chief. Now you begin to see the breadth and depth of this serious move on the part of the current mayor and current Council members to stop at nothing to get rid of Chief Lum.
The Garden Island has done a credible job of responsible reporting on the performance of the current Police Department. It is up to the public to raise its voice in support of clean government and move this county out of the 19th Century into the 21st Century. Some voices at the coming Police Commission special meeting on Wednesday, Sept 14, at 2 p.m., which will no doubt be covered by the news media as well as Hoike, should help to alert the general public on the deplorable depth to which this county government has descended in playing dirty politics.
As I mentioned last week, the Council and the Mayor have launched, much earlier than in past years, their re-election campaign. Last Thursday there were, on the County Council agenda, no less than SIX property tax relief measures – Draft Bills number 2142, 2144, 2145, 2146, 2147 and 2148. The most innovative one is 2144, introduce by JoAnn Yukimura who, as you will recall, has been running these marathon 4-hour sessions on Vacation Rental. This bill ostensibly offers a property owner a 30% discount on his tax bill if he would promise not to sell the property for ten years. Without stipulating anything as to what the property is used for! Now that is very interesting.
If you look up the assessment records of most, if not all vacation rentals you’ll find that no exemptions are taken, so these properties are assessed at around
$1 million and more, with a resulting property tax generally of around $4,000 and more. There appears to be no dispute that “vacation rental” is a commercial activity, yet our Council members steadfastly refuse to recognize this bit of reality. Otherwise, the property tax would be doubled. One can only surmise that our Council members believe that the use of residential property for vacation rental accrues to some public benefit and therefore deserves the lower property tax.
Under Bill 2144 the owner of vacation rental property can be further rewarded with a 30% discount on the property tax – with the result that what logically would be a property tax of $8,000 would first be reduced to $4,000 by not recognizing its commercial use; and, under Bill 2144, reduced to $2,800 if the property owner promises not to sell it for ten years. After all, why would anyone want to sell when such a good deal is offered by the government?
Now, let’s hear from the County Council what great public benefits accrue from vocational rentals to warrant a 65% reduction (from $8,000 to $2,800) in the property tax? But, alas, the public will not be allowed to ask the question!
After I pointed out the interesting feature of this bill during the Council meeting, Council member JoAnn Yukimura started to ask me some questions. Before I could answer, Chair Asing shut her and me off! Saying he didn’t want to hear any more testimony, he further ruled that testimony on the other five tax bills would
not be allowed either, giving as the reason for his “willful violation of the Sunshine Law” that I and the others could wait till those bills are heard before the Council Committees and at the public hearing on the bills. The law is very clear that if an item is on the published agenda of the meeting of a government body, the public has the RIGHT to testify on it. So I guess beyond suing Kaipo for refusing to release the records of the over 140 executive sessions he has conducted since becoming chair of the Council, I’ll have to sue him also for this latest willful violation of HRS 92. Then he will have another opportunity to attack me for causing him to waste the public’s money to defend himself. Hey, that’s a pretty good scheme, Kaipo, to make sure the public will never question anything the Council says or does! Because if you do your property tax will go up!
For more on recent Kauai Property Tax Proposals see...
Island Breath: Kauai Property Tax