WAILUKU - Maui County Council members heard from farmers this week asking them to take more time before making changes to the county's agricultural property tax laws.
The council Budget and Finance Committee met Tuesday to discuss a proposal that would carve out the land under a home on agricultural property and require it to be taxed in the same way as any other residential lot. Council members supporting the measure said it would make the property tax system more fair and equal for all residents.
But many farmers said they were concerned about any changes that would likely increase what they pay in property taxes.
"We have a tax equity issue," said Darren Strand, president of the Maui County Farm Bureau and Haliimaile Pineapple Co. "As a business operator, that's not my issue. My issue is, any increase in taxes is going to hurt my bottom line."
He echoed others in calling for more review.
"There just hasn't been enough time for us to process (this) and really get the information out," he said.
Council members agreed, deciding to defer discussion of the issue and schedule nighttime meetings in the community before taking action.
"There's a lot of concern out there, and I'd like to take a little extra time to have people get their questions answered," said Council Member Mike White, who introduced the legislation and has spearheaded discussion of disparities in the agricultural property tax system.
Under White's proposal, the county would tax the "house lot" on agricultural property based on its fair market value, as if it were a stand-alone lot.
That would be a significant change from the current system, in which the county estimates the value of the house lot only as a percentage of what the entire property is worth.
The change would likely increase property taxes on a number of agricultural house lots, which under the current system often pay less in taxes than lots of the same size in residential areas.
"It gets back to a fairness issue," White said.
He and county finance officials said people affected by the change would see their tax bills go up by an average of $253 per year.
"That's not going to put anybody out of business," he said.
Farmers and ranchers said Tuesday that they would support changing the system to prevent "gentlemen's estates" from receiving benefits meant to protect true agriculture, but said they were concerned about changes that would increase their own bills.
They asked council members to take more time to review the proposal.
"We need more input from the industry," said Warren Watanabe, executive director of the Maui County Farm Bureau.
James Nobriga, a rancher in Kahakuloa and Waikapu, also agreed that "lavish gentlemen's estates" should pay their fair share.
"What I strongly disagree with is a one-size-fits-all proposal," he said.
He said farmers should not be "penalized" if they chose to live on their land.
He also asked that the issue be deferred for more review.
"It's a long-time problem that's trying to be fixed in a few months," he said.
Sumner Erdman of Ulupalakua Ranch noted the ranch owns 23 aging homes it provides to employees who live on ranch property. He wanted to know how the house-lot proposal would affect his tax bill.
"How do you come up with a value for that?" he asked.
Maui Cattlemen's Association Vice President John "Bobby" Brooks said his group wanted to see changes to stop the "abuse that is running amok" in agricultural property taxes.
He said he had serious concerns about any increase in taxes on ranch lands, but was open to changes in how his house was taxed.
"With the knowledge I have right now, I don't have a problem with paying for the house site," he said, "It's the rest of the property that I think we're more concerned with."
But Kula farmer Tom Rice said he didn't want to see any increase at all.
"If the taxes on the land are raised at all, for the house sites or anything, I end up being the one who pays the increase," he said.
Rice said he grows kale and other greens for sale to local grocery stores, and also has two homes on his farm, one for himself and another for his elderly mother.
He said he didn't believe that his tax bill would only go up by a few hundred dollars, noting that several homes in his neighborhood had been assessed at high values.
"The problem is, we don't get real numbers from the county until we're charged it, and the only recourse is we have to go through a ridiculously long process of appeals," he said.
Council members said they were willing to take more time to review the issue.
"I've heard from both sides over the last couple of weeks, and a lot of them are saying slow it down and make sure it comes out right," said Council Member Mike Victorino.
Council Member Joe Pontanilla said he understood the need for more public outreach, but he didn't want to delay the issue indefinitely. He said the proposal was a matter of fairness, and questioned why a homeowner in Kula should be paying less on their house lot than someone in his residency district of Kahului.
"Whether you live in Kula, Makawao, Molokai, Kahului, or wherever, no one farms on the land their home actually sits on," he said.
But Council Member Gladys Baisa said she'd been "deluged" by emails from farmers and ranchers in her district of Kula, and they were very concerned about the proposal.
"I'm not comfortable about rushing ahead, because I'm hearing my constituents say, please, we need more time to consider this," she said.
She said no one on the council wanted to make a change that would hurt legitimate farmers.
"I think we all believe that ag is important, and we want to do the best we can to support it," she said.
Erdman said in addition to tax subsidies, council members and other residents could show that support on their tables.
"When you ask how you could help farmers the most, I ask, 'What did you eat for dinner last night?' " he said. "I hope it was a steak, a salad and pineapple for dessert."
* Ilima Loomis can be reached at firstname.lastname@example.org.