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Bill may allow more veterans on disability to get tax relief

Lower tax rate would also extend to unmarried surviving partners of veterans

Veterans salute after a presentation of flower bouquets on Veterans Day, Nov. 11, 2020, at the Maui Veterans Cemetery in Makawao. The Maui County Council is considering a bill that would allow more veterans on disability to qualify for lower property tax rates. The Maui News / MATTHEW THAYER photos

Some property tax relief could be coming for Maui County residents and severely disabled veterans as a County Council committee unanimously advanced two bills for tax relief to the full council on Wednesday.

One of the bills that the council’s Budget, Finance and Economic Development Committee recommended for approval would lessen property taxes for the homes of unmarried surviving partners of veterans who died while on duty, along with totally disabled veterans.

The bill would allow veterans with a 70 percent or higher disability rating by the U.S. Veterans Administration to qualify for an annual real property tax bill of half the county’s minimum property tax. With the current minimum tax at $350 a year, that would mean $175 for qualifying veterans. (The bill originally proposed a rate of $150.)

Currently the standard to get the lower tax bill requires 100 percent disability.

Council Member Mike Molina, who introduced the bill and is a veteran himself, said that the council “has certainly been one that has been very sensitive, very progressive at providing tax relief for our citizens, for homeowners and also for tax relief for generational families that have owned property for many years, and also the exemption for people who are renting long term. It speaks volumes what this council is doing.”

Elinor Takahashi arranges flowers to put on the graves of her parents, Yoshimasa and Sumiko Kuniyoshi, on Nov. 10, 2020, at the Maui Veterans Cemetery in Makawao. The Maui County Council is considering a bill that would extend lower tax rates to more disabled veterans as well as to the unmarried surviving partners of veterans who died while on duty.

Molina added that there is also a new generation of veterans now that the U.S. has withdrawn from the war in Afghanistan.

“This is one way of showing support by providing tax relief for these folks who are also on limited incomes as well,” Molina said.

Molina also thanked Kihei resident Sean Lester, who brought the matter to his attention and also worked on the bill.

Lester, a Vietnam-era veteran, who testified Wednesday and also submitted written testimony, said that expanding the tax exemption to veterans with a 70 percent or higher disability rating “is a tangible way to support severely disabled veterans, their families, and their widows.”

“Now is a time of great uncertainty, with costs skyrocketing for our Maui County residents,” Lester said in written testimony. “The burden on severely disabled service-connected veterans with their limited ability to work and support their families — some for years or decades — asks for the attention and compassion of this body.”

The bill would take effect Jan. 1 but would not apply to the budget until the next fiscal year.

According to county budget documents, 334 totally disabled veterans in Maui County have filed for the existing tax exemption. Finance Director Scott Teruya said the county is not sure how many more veterans would qualify under the proposed bill.

On Wednesday, the committee also pushed forward a bill that would increase the homeowner exemption to $300,000. The bill said the council has found that escalated housing market inflation has substantially increased property value assessment, which has caused “undue burden for Maui County residents.”

The home exemption is a tax relief program that currently reduces taxable assessed value by $200,000.

The bill also raises the exemption for long-term rentals from $300,000 to $400,000.

Teruya said that if the bill were enacted under the current property tax rates the county would see $5.7 million less in tax revenue.

He added that the mayor is in support of the measure.

Committee Chairwoman Keani Rawlins-Fernandez said that the county may not need to absorb the cost as the council could make adjustments “in other tier thresholds” to make up for the difference.

The ordinance would take effect on Jan. 1.

Both bills will require two readings by the full council.

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

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