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County Council overrides Victorino’s property tax veto

New classifications to take effect July 1

WAILUKU — The Maui County Council voted 7 to 2 Friday afternoon to override Mayor Michael Victorino’s veto of a real property tax reform bill that would set new tax classifications.

Slated to take effect next fiscal year, Bill 59 changes the homeowner class to “owner-occupied” and puts parcels with dwellings that do not have a home exemption in a “non-owner-occupied” class.

Victorino vetoed the bill last week, pointing to taxpayers’ confusion and possible negative impacts. On Friday evening, he expressed worry over the council’s move.

“I’m disappointed with the council’s override and still have concerns over how Bill 59 would impact taxpayers,” Victorino said.

Those voting against the override were Council Members Riki Hokama and Yuki Lei Sugimura. Sugimura has said the bill will have big impacts on residents and urged the council to take more time for public outreach.

Bill 59 — along with Bill 58 to set the framework for tax tiers — was approved 7-1 by the council on Nov. 22.

During recent public meetings, some residents opposed the bills, with many saying the measure lacked sufficient community vetting. Testifiers also said they wanted to see examples of possible tier rates before the council moved on the measures.

“With all of the unknowns related to the proposed tiered rate structures, the new consolidation of classifications, and the new titles of the classifications, I feel that these changes are creating confusion for real property taxpayers,” Victorino said in a veto announcement last week that cited “concerns over the potential negative consequences of the proposed tax classifications.”

“I do not feel enough information has been provided to the taxpayers of Maui County to have a complete understanding of the potential impacts of this bill.”

Under the new classifications, the non-owner-occupied group includes agricultural and rural-zoned improved land with dwelling (affecting more than 4,000 properties); conservation-zoned improved with dwelling (more than 90); condominiums that are second homes or are rented long-term (more than 7,700); and vacant land condominiums not zoned commercial, industrial or hotel (more than 950).

Victorino said he objects to the council’s combining properties with dwellings in the current agricultural, conservation, apartment and rental classifications into the new non-owner-occupied group.

Combining the classifications sparked concerns because the four classifications currently have different tax rates. If they are combined, they would be under a single rate.

The current rates of the four classifications are residential ($5.60), agricultural ($5.94), apartment ($6.31) and conservation ($6.43).

Meanwhile, Victorino signed Bill 58 last week, which gives options and flexibility to set tiers at the same, similar or different rates.

Bill 58 establishes a framework for the tiered system but does not set new rates, council members have said. They added that rates would be set with public input over the spring budget session. If the public decides no tiers should be implemented, each tier can be set at the same rate. Tiered real property tax rates were intended to be established for the new classifications.

Council Members Alice Lee and Keani Rawlins Fernandez, who were part of the budget committee’s temporary investigative group on tax reform that helped produce the measures, have defended the bills, saying they have conducted community outreach and reiterating that the public will have time to offer additional feedback during upcoming budget sessions.

Both bills are slated to launch next fiscal year, which begins July 1.

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