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New property tax rates approved with cuts for some homeowners

Some council members want more review next budget session

Saddled by deadlines, the Maui County Council on Friday approved property tax rates for the next fiscal year, even as several members expressed a need for a more thorough review of property tax rates and policy.

Residents in owner-occupied homes will mostly see lower rates than they’re currently paying, but owners who don’t live in their homes, such as those who live off island and have a second home on Maui, will see higher rates for fiscal year 2023, which begins July 1.

Apartment rates were also cut, while a new category was created for property owners with long-term rentals.

Rates for hotels, resorts and time shares remain the same, although those in the tourism industry say they will pay more with higher valuations. The new rates also include an increase for all short-term rental categories.

The vote was 6-0 in favor, with Council Members Mike Molina, Kelly King and Shane Sinenci absent and excused.

“We have such a heavy reliance on the visitor industry, and in the long run there is an off balance with our different categories, because it’s so heavy in that direction (of the visitor industry), although I understand why,” Council Member Yuki Lei Sugimura said during the vote.

Maui Hotel and Lodging Association Executive Director Lisa Paulson said in prior public testimony that the visitor industry in Maui County provides nearly 55 percent of the county’s real property taxes, the highest of all counties.

“But I just would like to state that we need to be vigilant in terms of what we are doing realistically and sometimes policy and our actions should be more balanced,” Sugimura said.

She asked that people who are affected by the property rates come out early next year when the Budget, Finance and Economic Development Committee deliberates on the rates so members can hear their comments and suggestions.

Chairwoman Alice Lee voted in favor of the resolution setting the tax rates but said she was doing so with reservations.

“I thought the process was rather rigid,” she said.

She added that “perhaps the next time we need to be more focused, because we were all over the map, nine priorities instead of one or two.”

Lee said that in addition to tourism management, the council was “supposed to focus on diversification and that we didn’t really do that.”

“That’s something that is set for another time, the next time, and hopefully we will be able to achieve that goal in the next session,” Lee said.

Council Member Gabe Johnson said that one of his stances is “being fair during taxes.”

“And tax fairness does not mean that everyone is treated equally,” Johnson said. “Tax fairness is that everyone’s needs is being met. And if you have a big house or a large property value hotel, that means you can pay more. Because some people’s needs are not being met.”

He asked if the needs of the homeless or the need for affordable housing were being met.

“I can see the beaches are full of tourists and their needs are being met,” Johnson said.

Council Member Tasha Kama said the council worked long and hard on the rates and she supported the resolution.

She hoped that in the future the budget committee could take up some policy issues outside of the budget process and “take a deeper dive” and “come out with something that is maybe a little more balanced according to others.”

Under the council’s adopted property tax rates, the county will generate $432 million in property taxes. Under Mayor Michael Victorino’s proposed rates, the county would have seen approximately $419 million.

The full council plans to have a first reading on its fiscal 2023 budget of nearly $1.07 billion on May 26. Victorino had proposed a nearly $1.05 billion budget in March.

By law, the council has until June 10 to pass a budget, otherwise the mayor’s version takes effect.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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PROPERTY TAX RATES

• Owner-occupied:

Tier 1, up to $1 million: $2

Tier 2, $1,000,001 to $3 million: $2.10

Tier 3, more than $3 million: $2.71

• Non-owner-occupied:

Tier 1, up to $1 million: $5.85

Tier 2, $1,000,001 to $4.5 million: $8

Tier 3, more than $4.5 million: $12.50

• Apartment: $3.50

• Hotel and resort: $11.75

• Time share: $14.60

• Short-term rental:

Tier 1, up to $1 million: $11.85.

Tier 2, $1,000,001 to $3 million: $11.85.

Tier 3, more than $3 million: $11.85.

• Agricultural: $5.74

• Conservation: $6.43

• Commercial: $6.05

• Industrial: $7.05

• Commercial residential: $4.40

• Long-term rentals (new classification):

Tier 1, up to $1 million: $3

Tier 2, from $1,000,001 to $3 million: $5

Tier 3, more than $3 million: $8

All rates are per $1,000 of net taxable assessed valuation.

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