| PRESS RELEASES & UPADATES |
Property tax limit rejected
State high court action could mean higher levies
By NEIL MODIE
P-I REPORTER
Tossing a potential grenade into the 2008 political scene, a divided state Supreme Court ruled Thursday that Initiative 747, a 2001 measure limiting property tax growth to 1 percent a year, is unconstitutional.
State Attorney General Rob McKenna, whose office unsuccessfully defended I-747, said the 5-4 decision means state and local governments "now have the authority to increase property tax levies by up to 6 percent a year."
It was the third time the court has invalidated voter-approved, tax-limiting ballot propositions sponsored by for-profit initiative promoter Tim Eyman.
Washington voters passed I-747 in 2001 with 58 percent approval. But the Supreme Court upheld a 2006 decision by King County Superior Court Judge Mary Roberts, saying the initiative was improperly based on a law passed as Eyman's earlier Initiative 722, which already had been found unconstitutional.
As a result, the five-justice majority wrote, "the text of the initiative misled voters about the substantive impact of the initiative on existing law" by making the size of the fiscal impact appear to be less than it was.
Republican legislative and political leaders, eyeing what for them could be a juicy campaign issue, immediately challenged Democratic Gov. Chris Gregoire and the Democrat-controlled Legislature to reinstate I-747's 1 percent tax-increase limit. Failure to do so, they said, could lead to "massive property tax increases."
"Now Governor Gregoire has a responsibility to reimplement the clear intent of I-747 and keep the 1 percent property tax lid voters approved," state Republican Party Chairman Luke Esser said in a statement. "Governor Gregoire must decide whether she'll side with taxpayers or with government."
Gregoire issued a statement calling for "reinstating the will of the voters" and promising to ask the Legislature in January "to work with to thoughtfully reinstate a property tax cap." But she didn't say whether it should be as tight as 1 percent.
Last year, after Roberts ruled I-747 unconstitutional, the governor declined to say what she thought the correct limit should be, but she implied that it should be higher than 1 percent but lower than the old 6 percent limit.
In her statement, the governor called for a voluntary tax-increase moratorium, urging state and local government entities "to assure me that they will not increase property tax levies for their upcoming budgets as a result of the court decision." Most local governments are in the midst of preparing their 2008 tax and spending plans.
Gregoire also acknowledged the message sent by the outcomes of several tax-related measures on Tuesday's general election ballot, including passage of a new Eyman initiative to make tax increases more difficult. "We heard loud and clear on Tuesday evening that voters are concerned about their tax burden," she said.
Dino Rossi, her 2004 Republican election opponent who is challenging her again in 2008, called on the governor and the Legislature to "enact the will of the people into law."
Rossi said: "My opponent doesn't support the 1 percent property tax cap. That is troubling, but not surprising, since she is after all the governor for the government who is more concerned about making people pay higher taxes than honoring the will of the voters."
House Majority Leader Lynn Kessler, D-Hoquiam, said she thinks the Legislature should reinstate the 1 percent lid.
Senate Minority Leader Mike Hewitt, R-Walla Walla, also called for reinstating I-747's cap, saying the effect of Thursday's ruling is that "the lid now just jumped from 1 to 6 percent, opening the door to massive property tax increases."
The Supreme Court agreed with Roberts' 2006 opinion that I-747 was unconstitutional because it purported to amend I-722 after the latter was declared unconstitutional in 2001 -- even though that ruling occurred after I-747 was drafted and filed, and just two months before voters approved it. I-722 would have capped property tax increases at 2 percent.
Roberts had said that with I-722 invalid at the time of the election on the later initiative, I-747 reduced the tax-increase limit to 1 percent from 6 percent, but that voters were incorrectly told they were amending I-722 to reduce the cap to 1 percent from 2 percent.
That could cause a voter to think it would result in "a substantially different impact on the public coffers, as well as the perceived benefit to the individual voter's purse," the Supreme Court majority said in an opinion written by Justice Bobbe Bridge.
The four dissenters, in an opinion written by Justice Charles Johnson, disagreed, saying, "No reasonable argument can be sustained that voters were in any way misled or confused by the effect of I-747, which expressly and was specifically aimed at lowering the tax growth to 1 percent.
"The majority seems to suggest that the voters are unable to think or read for themselves, when in fact our democratic process is based on the assumption that voters do in fact read and understand the impact of their votes."
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SENIOR FAIR HIGHLIGHTS THE UNFAIR
LET HONOLULU VOTE staffed a booth at the Senior Fair this past weekend to inform voters about our effort to eliminate the City Charter prohibition that keeps voters from having initiative on City tax matters. During the three days we collected signatures and a lot of personal stories with some impressions that are worth sharing.
First, and foremost, LET HONOLULU VOTE attempts to help citizens understand that the only people who pay taxes in this state and city are those who cannot pass the tax on to another.
Who are those taxpayers? Those of us who do not have a business or renters to whom we can pass on any tax liability. These are the real and final taxpayers in Hawaii.
Most of the visitors to the Senior Fair were FINAL TAXPAYERS on whom the tax burden in Hawaii is the greatest. Nevertheless, even with a heavy burden, these same taxpayers fail to understand that they are the taxpayer of last resort. Several visitors actually said they did not pay taxes! Some even doubted that a store ever included property taxes in the price of food or prescription drugs being purchased in the store.
Here, below, are some of the personal stories and observations gleaned from three days at the Senior Fair:
Voter turnout in Hawaii is the lowest in the nation.
- A large number of the people walking down the aisle would fail to acknowledge our booth - they seemed to be in a daze - almost looking through you. Since about 40% of the 980,000 eligible voters in Hawaii even take the time to vote; it is not surprising that 60% of the people on the street would be disinterested in an organization titled LET HONOLULU VOTE. But to find so much disinterest among more senior residents was surprising.
Elite voters want to continue controlling Hawaii.
- Many expressed a concern that if more people voted or had more chances to vote our City would be worse off than if fewer or more "informed" people voted. When asked if voters could more easily vote on clear issues like yes or no on a specific tax; they would say "the ballot writers complicate the question so much that you cannot understand what you are voting for or against." There seems to be a significant distrust of those that prepare the ballot wordings and even a stronger belief that only a few citizens are capable of understanding ballot issues.
Some people do not pay any taxes and I sure would like to learn how they do it!!
- Many Fair visitors claimed that they did not pay property taxes or any other taxes. My response; PLEASE TELL ME HOW YOU DO THAT!! When they were told that a business, like a grocery store, must include in their prices the cost of their property taxes; the visitor just did not believe it. Hawaii seniors seem to need a lesson in economics.
Special programs are complex and unfair!
- Current property tax exemption special programs (e.g. circuit breaker) are complex to understand and unfair. Most did not understand that the deadline to file for these programs is October 1, 2007 for the tax year July 2008 through June 2009. For those who miss the October deadline they must wait until July 2009 to benefit from any of the special exemption programs. One man bought his first house in '74 and was able to save and buy another in '93. Although he is now over 75 with little income (the second rental generates $12,000/yr) and is well under the $50,000 max for the circuit breaker program; he cannot qualify since he owns a property in addition to his current residence. Another resident inherited a small property in the Philippines that he has never seen. Nevertheless, since the rule is that you cannot own any other property "anywhere in the world" he cannot apply for the circuit breaker. Is the alternative to just "lie"?
Assessment appeals take too much time.
- Several residents complained that they had been waiting two years to have their assessment appeal heard even though they paid the $25 appeal filing fee. Of course in their next sentence they would comment that they doubted any adjustment since they had little understanding of the system.
State income tax breaks for some is unfair to most!
- Retired seniors complained that exempting from state tax all retirement income coming from defined retirement programs such as the federal, state, and county employee retirement programs and the pensions from unions and large corporations was unfair. For those residents who rely on savings, investments, IRA, and 401k programs to fund their retirements; they must pay the full state tax. Of course, when some get a break all the others must pay extra to make up for those not paying. Either everyone should pay on all retirement income or no one should pay on any retirement income like Social Security. The conclusion was that either exempt state tax on all retirement income or none. To do otherwise is UNFAIR.
Politicians take care of themselves first.
- Numerous signers of our petition called for politicians to be covered by Social Security only instead of state pensions. Their complaint seemed to be a desire to have the politicians live with the same constraints that most retiree's are experiencing. Visitors claimed that elected officials have special retirement rules that are different from normal state/city employees.
RECALL of politicians.
- A few fair attendee's asked to sign a recall petition for the City Council and the Mayor since they were outraged at high taxes and the poor condition of roads. We informed these folks that recall is authorized in the City Charter but we did not know of any group circulating such a recall petition at this time.
For LET HONOLULU VOTE the Senior Fair was an excellent event that gave the opportunity to gather petition signatures and also gauge the intensity of the concern about taxes by the senior voters. As Honolulu moves into the 2008 election year expect to see opinions get more intense as the full impact of business and residential property tax increases is factored into rents and the cost of goods sold in stores/hotels.
Summary
Hawaii politicians are put in office by a small group of voters -- usually less than 25% of the eligible voters in a contested election. Yet politicians claim to represent their districts and suggest that they can make tax and spend decisions better than the taxpayers. The Senior Fair highlighted the unfairness of taxes and the need for better voter education. LET HONOLULU VOTE will continue to promote initiative on tax matters as the best way to make tax and spend decisions in Honolulu and the best way to educate voters one issue at a time.
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Paul Smith, speaking to the Kailua Chamber of Commerce pointed out the following:
THE ONLY PEOPLE WHO PAY PROPERTY TAXES ARE THOSE WHO CANNOT PASS THE PROPERTY TAXES ON TO RENTERS OR CUSTOMERS!
ALL THE MORE REASON FOR INDIVIDUAL CONSUMERS TO UNITE AND CHANGE THE CITY CHARTER TO ALLOW INITIATIVE ON TAX ISSUES.
Interesting, the worksheet Paul circulated used a 2007-2008 residential rate of $3.24 while the newspaper on Thursday 17 May reported a proposed rate of $3.29. I wonder what rate will survive?
Paul also announced a new set of worksheets on the web page under "Worksheet downloads" that help a property tax payer to calculate the true propterty tax increase over the last ten years --NOT JUST THE RATE DECREASES AS THE CITY COUNCIL CALCULATES.
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6 June 2007
TO: CITY COUNCIL MEMBERS
FROM: PAUL E. SMITH, CO CHAIR, LET HONOLULU VOTE
SUBJECT: OPPOSITION TO RES 07-80, CD1
The following comes from the budget summary, page 42, Administation FY 2008 budget submission.
- FY2004 100% assessed value of all real estate in Honolulu was $79 billion and the average tax rate was $5.50 per thousand. The City collected $435 million.
- FY2008 100% assessed value of all real estate in Honolulu is $167 billion and the average tax rate is expected to be $4.68 per thousand. The City will collect $782 million this coming year.
In 2008 the City will collect $347 million more from Honolulu residents than in 2004. That is an 80% increase over four years or a compounded annual growth rate of 15% per year. Even the Dow Jones industrial average grew at less than 7% per year -- half the compounded rate of the City! Of course, Council Members quickly note that all these increases were necessary and they did lower the average property tax rate per thousand by 15% to $4.68. How considerate, a 15% lower rate and an 80% higher assessment base!
What makes you, Honorable City Council Members, think that you have the right to annually take from the residents over twice what even the Dow Jones industrial average is returning for investments in risky stocks?
Who do you think really pays for these tax increases and your out-of-control spending?
The recent Hawaii State Tax Review Commission noted that tourists pay 9% of the property taxes.
So, deduct 9% and then you will see that the renter, homeowner, and consumer will pay $316 million more this year than in 2004. We have less than one million people in this County so that is $316 more expenses per person! Please note, I did not say the businesses or landlords or hotels will pay more; I said the renter, homeowner, and consumer will pay more.
Remember, the only person in this town who pays property or GE taxes is the final consumer, like me, who does not have a way to pass those taxes along by including those taxes in the price of rent or food.
Longs Pali has a property tax bill that is up over 100% in the last three years. Who will pay that increase? Not Longs. No, it will be me and all the others who get their prescriptions and other supplies at Longs.
PLEASE, COUNCIL MEMBERS, CONTROL SPENDING!! LIMIT GROWTH TO 5% OR LESS!!
PLEASE, COUNCIL MEMBERS, REMEMBER WHO PAYS THE BILL AND THAT WAGES ARE NOT GROWING AT +5% PER YEAR.
PLEASE, COUNCIL MEMBERS, MAKE EXEMPT PROPERTIES PAY THEIR FAIR SHARE TO RUN OUR GOVERNMENT. A $100 TOKEN PAYMENT FOR GARBAGE, FIRE, POLICE, ROADS, SUNSET ON THE BEACH, IS AN INSULT TO THE REST OF US WHO PAY THE FULL TAX.
PLEASE, COUNCIL MEMBERS, THE AVERAGE RATE MUST NOT EXCEED $3.17/THOUSAND.
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OPPOSITION TO RES 07-80, CD1
TO Councilmember Barbara Marshall, Chair, Honolulu City Council
FROM: Robert R. Kessler, Co-Chair, LET HONOLULU VOTE
DATE: June 6, 2007
RE: OPPOSITION TO RESOLUTION 07-80, CD1, DETERMINING REAL PROPERTY TAX RATES
The Council is fully aware of the adverse impact in our community of skyrocketing real property taxes. As we all decry the high price of living in paradise and the shortage of affordable housing, this City Government contributes to those problems by consuming the unprecedented windfall tax revenues resulting from real property appreciation. This at the same time that the City is raising other fees and taxes, such as the sewer fees. Despite cries from the public for relief, this Council and this City Administration turn a deaf ear and allow budget growth to consume the available revenue. The relentless onslaught of taxes can only harm our economy in the long run.
The one-time tax credits or means tested caps which accompany this resolution offer no relief to the community at large. And this resolution merely reduces the rate of tax INCREASE for residential real property while finding revenue offsets in other property categories in the name of parity and balance. This Council seems blind to the fact that all of those taxes, even in non-residential categories, ultimately come from the pockets of your constituents. This Council should be considering bold, deep rate cuts (e.g., 40%) in all categories to provide real long-term relief to our taxpayers. And, of course, you should adopt a fiscally responsible approach to budgeting, making hard choices and spending cuts. I refer the Council to a recent Wall Street Journal reporting that the Government of Florida may initiate deep real property tax cuts to offset the economic slowdown in that state. That would be a real act of fiscal boldness.
LET HONOLULU VOTE is attempting to amend the City Charter to restore citizens’ right to petition our government on tax issues. We are gaining a valuable insight into the mood of the public on tax issues, particularly property taxes. The public is ready to insert itself into the tax process to force the hard choices that this City Government is not willing to make. This resolution will just make our job that much easier.
Robert R. Kessler, Co-Chair
LET HONOLULU VOTE
444 Nahua St., PH 09
Honolulu, HI 96815
Ph. 922-6188 |
LET HONOLULU VOTE
( www.lethonoluluvote.org )
350 Ward Avenue #106-364
Honolulu, Hawaii 96814-4004
REF: RESOLUTION 07-80 PROPOSED CD1
TESTIMONY AGAINST THE PROPOSAL
My name is Paul E. Smith, Co Chair of LET HONOLULU VOTE.org
LET HONOLULU VOTE ADVOCATES AMENDING THE CITY CHARTER TO DELETE THE FOUR WORDS THAT CURRENTLY PROHIBIT COUNTY VOTER INITIATIVE ON TAX MATTERS.
TAXPAYERS WANT TO HAVE INITIATIVE ON TAX MATTERS BECAUSE:
1. THE COUNCIL IS MAKING MAJOR DECISIONS IN THE BILLIONS OF DOLLARS THAT COMMITT THE CITY TO FUTURE TAXES FOR DECADES; VOTERS SHOULD BE ABLE TO EXPRESS THEIR VIEW ON SUCH LONG-TERM COMMITMENTS; AND
2. TAXPAYERS WILL ONLY GET THE COUNCIL MEMBERS UNDIVIDED ATTENTION ON TAXATION ISSUES ONCE VOTERS CAN THREATEN TO TAKE AWAY TAXING AUTHORITY BY WAY OF A VOTER INITIATIVE.
The 2008 proposed Executive Operating Budget totals $1.636 billion, an increase of 9.7 percent over the fiscal year 2007 budget of $1.491 billion.
The Capital Budget proposal for fiscal year 2008 is $724 million, an increase of 6.4 percent over the fiscal year 2007 budget of $681 million.
Real Property taxes provide 42% of the City operating funds.
THE PROPOSED BUDGET WILL COLLECT OVER $2500 FOR EACH OF THE 922,000 MEN, WOMEN, AND CHILDREN LIVING IN HONOLULU.
THIS $2,500+ WILL COME IN 2008 FROM INCREASES, OVER 2006 ACTUAL, OF:
32% IN PROPERTY TAX RECEIPTS;
100% INCREASE FROM THE TRANSIT GE TAX SURCHARGE;
41% INCREASE IN SEWER RECEIPTS; &
11% IN VEHICLE WEIGHT TAXES.
THE MAYOR’S 2008 BUDGET PROJECTS CONTINUED INCREASES TO 2010, SUCH AS:
1. Property taxes UP 8% in 2009 and then flat, oh, REALLY?
2. SEWER REVENUES UP 25% NEXT FISCAL YEAR AND UP OVER 100% BY 2013.
SOME EXAMPLES OF SPENDING PRIORITIES:
THE MAYOR IS WILLING TO DEVOTE OVER $100 MILLION FOR THE BUS SUBSIDY – EQUAL TO ALL OF THE PROPERTY TAXES THAT COME FROM 50,000 HOUSES VALUED AT $600,000 EACH – WHILE HE ONLY WANTS TO SPEND $25 MILLION ON HIGHWAYS – LESS THAN $25 PER PERSON.
THE SIMPLE FACT THAT THE COUNCIL MUST REMEMBER IS:
THE ONLY PERSON WHO PAYS PROPERTY TAXES IN HONOLULU IS THE PERSON WHO CANNOT PASS THOSE TAXES ON TO SOMEONE ELSE!!
THE WEB PAGE FOR LETHONOLULUVOTE.ORG HAS AN EXCEL WORKSHEET THAT WILL DO ALL THE CALCULATIONS FOR PROPERTY OWNERS IF THEY CAN ENTER THE HISTORICAL ASSESSMENT VALUES FOR A PROPERTY. THE ASSESSMENT VALUES FOR THE LAST FIVE YEARS CAN BE FOUND AT HONOLULUPROPERTYTAX.COM
A TEN YEAR HISTORY OF INDUSTRIAL AND NON RESIDENTIAL PROPERTY CAN ALSO BE FOUND AT LETHONOLULUVOTGE.ORG.
THE WORKSHEET ILLUSTRATES:
THE PROPERTY TAX FOR MY HOUSE IS UP 97% SINCE 2003 AND 63% SINCE 1996. AT THE SAME TIME THE TAX RATE IS DOWN 12% AND 7%.
DO YOU CALL THAT RATE CHANGE A TAX CUT?
SINCE THIS RESIDENTIAL TAX CANNOT BE PASSED ON; I PAY 100% OF THIS TAX INCREASE! A NEIGHBOR UP THE STREET IS ASSESSED MUCH HIGHER BUT BECAUSE THAT PROPERTY IS OWNED BY A “SOUL SOCIETY” THEY PAY $100 FOR THE SAME SERVICES I PAY OVER $4800.
NOW LOOK AT COMMERCIAL RATES!
THE PROPERTY TAX FOR LONGS PALI PROPERTY IS UP OVER 100% SINCE 2003. WHO DO YOU THINK PAYS THAT INCREASE? NOT LONGS! LONGS CUSTOMERS PAY FOR THAT INCREASE BY WAY OF HIGHER PRICES FOR FOOD, DRUGS, AND SUPPLIES.
THE CITY COUNCIL MUST:
· CUT EXPENSES; AND
· CUT EXEMPTIONS
BEFORE SETTING NEW TAX RATES.
REMEMBER, RENTERS AND HOMEOWNERS PAY 100% OF ALL PROPERTY TAXES REGARDELESS OF WHETHER THE TAXES ARE COMMERCIAL OR RESIDENTIAL.
STOP SPENDING BEYOND OUR MEANS.
STOP COMMITTING US TO A FUTURE OF MORE TAX INCREASES.
STOP CALLING A RATE REDUCTION A TAX CUT WHEN YOU KNOW ASSESSMENTS ARE INCREASING TAX PAYMENTS.
PLEASE GO BACK TO THE DRAWING BOARDS AND ADDRESS EXPENSES AND EXEMPTIONS BEFORE SETTING PROPERTY TAX RATES.
IF THE COUNCIL SETS PROPERTY TAX RATES TODAY (MAY 23) AND CONTINUES TO LEAVE IN PLACE (1) WASTEFUL SPENDING AND (2) RAMPANT PROPERTY TAX EXEMPTIONS FOR THE SELECT FEW WHO PAY ONLY $100 FOR ALL CITY SERVICES; THEN SUCH ACTION SHOULD BE CALLED CRIMINAL.
MAKE THE TOUGH DECISIONS YOU WERE ELECTED TO MAKE OR VOTERS WILL TAKE THAT TAX DECISION AUTHORITY AWAY FROM THE CITY COUNCIL FOR GOOD VIA A CHARTER AMENDMENT.
IT IS YOUR CHOICE. FAIL TO PROTECT THE ULTIMATE TAXPAYER (WHO IS ALSO THE VOTER) AND THE VOTERS WILL ACT FOR YOU AND TO PROTECT THEMSELVES. |
March 28, 2007
To the Editor
Congratulations, LET HONOLULU VOTE supporters! You’re on the radar! Keith Rollman, a political appointee of Mayor Mufi Hannemann, has noticed us and wants to divert our attention to the State, who he claims is the real tax culprit.
Mr. Rollman makes a couple of valid points. It’s a matter of record that Hawaii’s residents carry one of the heaviest tax burdens in the country. And there’s no question that State taxes impose a much larger proportion of that burden than City taxes. So, asks Mr. Rollman, why does LET HONOLULU VOTE pick on the City? The answer is simple. Because we can. And because now we must.
Hawaii’s State Constitution does not provide for citizen initiative at the State level. So for now the State is out of bounds. (Maybe Mr. Rollman would support a Constitutional Convention?) The Honolulu City Charter, on the other hand, does provide for citizen initiative but with exceptions. One of those exceptions, inexplicably, is “any ordinance authorizing or repealing the levy of taxes.” That means that Honolulu voters don’t have a right to force a tax issue onto the ballot! It doesn’t make sense that the powers we delegate to our elected officials, particularly the power of taxation, are untouchable and irrevocable. So LET HONOLULU VOTE has chosen to focus on amending the City Charter to restore that right to the voters of Honolulu. We’re going to open the door for future initiatives that actually address specific tax issues and make our City Government accountable!
Will our proposed Charter change perturb the City’s planning process? Not even close. Mr. Rollman knows full well that the initiative process is very demanding and won’t be taken on for manini reasons. The City’s planning process is safe, as long as tax policies are reasonable.
Our thanks to the Mayor and the Council. You all have been very helpful to our cause. Despite the loud roar of genuine pain over the endless increases in C&C taxes and fees (see the link on LETHONOLULUVOTE.ORG) the Mayor has resisted every attempt to reverse, or even slow, tax increases. Meanwhile the Council proclaims that something must be done, even as it dithers and does nothing. Since they won’t do anything, the people will.
Those I meet while collecting signatures, who Mr. Rollman calls the “least informed” to make hard decisions, understand this issue very well. Yes, they understand the sewer issue and the problems inherited by this City Administration. Should they have to pay for those sewers yet again, or should this Administration make the hard priority choices promised by Candidate Hannemann? They also understand that they are facing massive new public works spending, followed by endless subsidies, O&M costs and replacement costs. They fully understand they will only see tax increases and never relief. Indeed, they are concerned that they ultimately will be taxed out of their homes – maybe even out of the state. They are eager to be heard!
Bill Brennan, also a Mayoral political appointee, recently chastised Councilmember Charles Djou for not being able to “line up 4 people, out of the entire world, to vote with him” on the side of fiscal sanity. Mr. Brennan’s offhand remark drives home our point – projects and financial commitments this large should not be left up to four people. Or even nine people. On the big issues, Mr. Rollman, LET HONOLULU VOTE. We’re smarter than you think.
Robert Kessler
Co-Chair, LET HONOLULU VOTE
Ph. 922-6188 |
Aloha Friends of LET HONOLULU VOTE -
I hope you all had the chance to see Paul Smith and Bob Kessler interviewed on Malia Zimmerman's new TV program, "The News Behind the News". It aired February 19 on Channel 54. It will repeat on the same channel so if you missed it the first time check the TV listings for a replay.
Also check the Sunday March 4 Star-Bulletin for a great op-ed by Paul Smith.
Paul and Bob also will be on "Community Matters" with Mike Buck this Sunday Morning, March 4. Also present will be Pearl Johnson, of League of Women Voters Honolulu, who supports our effort. Get up early for coffee because it's on from 7 to 8 AM. It airs simultaneousley on several radio stations
KHVH 830am
KHBZ 990am
KSSK 590am
KSSK 92.3fm
HOT 93.9fm
STAR 101.9fm
ISLAND 98.5fm
Congratulations to Bud Ebel, who delivered us 1,000 signatures last week. Bud will continue collecting on the Leeward coast; you can see his schedule on our web site LETHONOLULUVOTE.ORG.
Thank you, Devin Statts at Affordable Towing, for turning in a bunch of signatures. And thanks to the Oahu League of Republican Women for several pages of signatures.
Paul and Bob will be collecting signatures in front of McCoy Pavillion at Ala Moana Park on Sunday, March 4. Starts at 9AM. Come on down! Bring cookies.
Let us know when and where you will be collecting and we'll put it on our CALENDAR page to get you some traffic.
FYI, we've contacted Times Supermarkets, Sam's Club and Wal-Mart about collecting signatures at their stores. We'll let you know how we make out. If anyone can help with contacts at these stores plus COSTCO please let me know. It often takes a special contact to get approval to sit outside any of these stores.
An important reminder. While our objective is to get our measure on the November 2008 ballot, we really want most of our signatures collected by this Summer, when the City is addressing the budget. We want them to know we're here, and to feel the heat.
Mahalo nui loa to all of you for your help. You're making this happen.
Bob Kessler
Co-Chair, LET HONOLULU VOTE
Ph. 922-6188 |
HAWAII: “NO KA OI” for TAXES
Prepared by: Paul E. Smith*
How does it feel to be the BEST? Or, as “no ka oi” says; how does it feel to be “the best with none better”?
When it comes to TAXES, as shown by a recent compilation of information from government data banks; HAWAII is one of the very best at taxing and spending among the 50 states.
The Bureau of the Census reports that, on a per capita basis, Hawaii, in 2005, was the #1 state in collections of general sales tax and in 2006 had the fifth highest percentage (11.7%) of state and local tax burden as a percentage of state income. These numbers are statewide and do not consider the January 2007 implementation of the 12.5% GET surcharge increase on Oahu. For example, the 2006 ranking below shows the top five states with the highest percentage of state and local tax burden as a percentage of the 2006 state income:
1. MAINE @ 13.5% with state income ranked #31 @ $34,935
2. NEW YORK @ 12.9% with state income ranked #5 @ $44,571
3. OHIO @ 12% with state income ranked #26 @ $36,054
4. MINNESOTA @ 11.9% with state income ranked #9 @ $41,363
5. HAWAII @ 11.7% with state income ranked #19 @ $38,269
Looking at the information above demonstrates that life could be a lot worse if one lived in Maine or Ohio, especially after considering the weather! The point of the ranking, however, is to show where the burden of taxation falls most heavily on wage earners. For example, Hawaii has the nation’s 19th highest income per capita and, by percentage, is the fifth highest tax collector. Imagine living in Maine or Ohio where incomes are 10-15% lower than Hawaii and yet residents are taxed higher than Hawaii! Relatively speaking, one may be better able to survive a life in New York or Minnesota where wages are 10-20% greater than Hawaii even if the percentage taken by taxes is greater than Hawaii.
With a little investigation into the data, however, one learns that Hawaii not only is a high tax state but the taxes collected are among the most regressive (e.g. hit hardest the lower the income) in the nation. The 2006 state individual income tax rates for Hawaii has the top tax rate being applied to household incomes of $40,000 and greater. That $40,000 threshold is only 5% above the per capita income in Hawaii. Glancing at the tax rate tables of other states one finds that there are three states whose 7.8% (or higher) tax rate applies to incomes less than $40,000:
1. Oregon 9% @ $6,500
2. Maine 8.5% @ $17,700
3. Idaho 7.8% @ $23,178
4. District of Columbia 8.7% @ $40,000
5. Hawaii 8.25% @ $40,000
6. California 9.3% @ $41,476
7. Iowa 8.98% @ $57,106
When one combines the highest and most comprehensive sales tax collections in the nation (includes rent, food, medicine, services, etc) with the third highest marginal tax rate on incomes of $40,000; it is easy to understand why low to average income earning residents of Hawaii have less after tax discretionary income than most citizens in the fifty states. Again, a regressive tax structure is a tax structure that takes, as a percentage, a greater amount of income from lower income earners than high income earners. The tax structure in Hawaii is designed to impact, most significantly, those whose incomes are used primarily for housing, food, medicine, or services, instead of savings or investments. Furthermore, the highest marginal tax rate (8.25%) is set so low that any family of four at the median family income level ($71,320) is immediately taxed at the highest marginal rate. Data on median income can be viewed at: http://www.census.gov/hhes/income/4person.html
The information compiled by the National Tax Foundation and available at http://www.taxfoundation.org/publications/show/2181.html is full of additional information that can illustrate how the total tax burden in Hawaii (even before the implementation of the GE tax surcharge in January 2007) is the fifth highest in the nation. Also, information like that listed below is available:
1. Second highest beer tax ($0.93/gallon) in the nation;
2. Hawaii has the 14th highest debt and the 15th highest state and local spending per capita;
3. Hawaii receives the 5th highest level of federal expenditures, per capita, of all the states and these expenditures exceed federal taxes paid by Hawaii by $2,300 per capita and;
4. Hawaii property taxes paid are among the 10 lowest in the nation since most taxes in Hawaii are collected by GE (sales) tax and state income tax.
Summary
Hawaii tax policy, with a reliance on the general excise, income, and property tax is protected from erosion by inflation. In fact, inflation of prices, wages, and property brings a windfall increase in tax revenue to state and city coffers when tax rates are not adjusted to retain balance. Legislators, at all levels, have rarely changed rates and/or deductions to recognize the impact of inflation. The result of turning a blind eye to inflation is an increasingly regressive tax structure that exacerbates the difficulty for residents to find affordable housing, medical supplies/services, and sufficient food. Couple the always increasing tax burden with a regulatory environment that slows down the development of affordable options (housing, insurance, shipping, etc.) and Hawaii ends up with a market place that has continually poorer consumers chasing fewer and more expensive goods. The only beneficiary of such a system is the state and county tax collectors who benefit from rising prices and get reelected by creating government programs to give back to the taxpaying consumer what should not have been taken in the beginning.
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*Hawaii resident and member of the National Tax Foundation and a Director of the Tax Foundation of Hawaii. He is CoChair of LET HONOLULU VOTE (www.lethonoluluvote.org). He owned and managed a Hawaii manufacturing business for twenty years and now licenses technology to firms around the world. |
EXEMPTIONS RAISE PROPERTY TAXES (Testimony presented to the City Council)
February 23, 2007
Council Members, my name is Paul Smith and I am Co Chair of LET HONOLULU VOTE; a non partisan effort to amend the City Charter so voters can have initiative power over taxes.
Who among us has boarded a flight or checked into a hotel and later found that another person got the same trip or the same room at a much lower price? Probably everyone has had this experience.
All but three of the property tax measures up for discussion today are going to reduce fairness and increase the complexity for Honolulu property taxpayers. None will make our system more fair, predictable, honest, or transparent. For example:
- Bill 5 homeowner exemption
- Bill 7 owner occupant classification
- Bill 11 tax credit
- Bill 12 owner occupant exemption increase
- Bill 13 disabled exemption increase
- Bill 15 eligibility for tax credit
- Bill 16 onetime credit
- Bill 17 cap assessment based on years in home and
- Bill 18 exemption for 70 year old
The purpose of my testimony is to highlight the inequity in our property tax system and to encourage Council members to be honest and fair with residents - property owners and renters.
For example, many residents are paying the full property tax rate on the assessed value of their home, apartment, or property. But you, Council Members, know that in reality most residents pay extra tax to make up for all those property owners and renters who have exemptions and pay nothing or, at best, a simple $100 per year processing fee.
Honolulu exempts so many properties and organizations from paying property taxes that the impact on regular residents is significant.
I challenge the City Council to make public a list of all exemptions and credits showing the amount by which these exemptions reduce total revenue to the City compared to what would normally be collected if all properties were treated the same.
Such a list of “lost” revenue is really an essential prerequisite for the Council’s overall tax rate setting discussions. I assume that Council Members realize that exempted properties do benefit from tax funded roads, sewer, fire, police, and ambulance service, sunset on the beach, parks, and many get full trash pickup services even though they do not pay for such services.
Let’s be honest. Most taxpayers, I believe, would expect to find recognized churches or charities on the list of exempted properties. But, I wonder how many taxpayers know that their neighbor’s house may be exempt from paying property taxes? For example, all DHHL lands, plus the buildings on the land, are property tax exempt. State and Federal buildings/properties are tax exempt. Any designated historic building and even “mind relaxation groups” are exempt from property taxes.
Again, I challenge the Council to provide a complete listing of all EXEMPTIONS so the Council and the public can learn what residents pay to support those who pay nothing.
In your action today, please do not complicate the property tax system with added credits and exemptions. Instead, do your job, and provide predictability and accountability. I suggest:
- Reduce the number and complicated credits and exemptions and/or raise the minimum filing fee;
- Pass an ordinance to automatically adjust the tax rate each year so that the new rate produces the same revenue as the previous year. Then increase taxes only through public legislation on which each of you must vote. Such an ordinance would eliminate the stealth tax increase when assessments rise;
- Control expenditures by demanding that the City increase productivity yearly.
I urge that you stop the merry-go-round of additional legislation and the pandering to groups and instead start from scratch to rebuild our property tax system so it is fair, honest, predictable, and transparent.
The measures you are debating today will almost certainly make property taxes more unfair, complex, and misunderstood by residents even if you do succeed in placating one group at the expense of another. |
LET HONOLULU VOTE FEATURED ON OLELO "NEWS BEHIND THE NEWS"
MONDAY, FEBRUARY 19 AT 6 PM BOB KESSLER AND PAUL SMITH ARE INTERVIEWED BY MALIA ZIMMERMAN ON CHANNEL 54.
WATCH THIS IMPORTANT PROGRAM TO LEARN WHY THE TAX PETITION EFFORT IS SO IMPORTANT. |
Living in Honolulu should not be an gamble; especially a gamble where the odds are against the taxpayer.
Taxpayers are stuck with a regressive sales tax on all essentials for life and health.
Owning or renting a place to live in Honolulu is a crap shoot and one never knows what the TAX cost will be from year to year.
Worst of all; politicians play off one group against the other.
- Old against young,
- home owner vs. renter,
- Tax exempt against taxable,
- Resident against business,
- rich against poor, and
- the political breaks for different groups make life expensive for everyone.
LET HONOLULU VOTE wants to challenge the politicians to level the playing field and turn the odds back to even giving the taxpayer a chance.
LET HONOLULU VOTE wants to permit voters to have initiative and vote on taxes if they believe that the tax is wrong; too much or too little.
LET HONOLULU VOTE will start January 20 collecting 60,000 signatures to change the City Charter to permit voter initiative on taxes. Voters would vote on this ballot measure in Nov. 2008. If the Charter amendment is passed; then voters will have the right to bring tax issues up for public discussion, debate, and a vote.
Paul E. Smith
Bob Kessler
Co Chairs
LET HONOLULU VOTE
Phone: 808-524-2436
Cell: 808-220-0992 |
| LET HONOLULU VOTE BLOG @ http://lethonoluluvote.blogspot.com/ |
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