County tackles property tax reform

Hawaii County is taking another crack at property tax reform.

Hawaii County is taking another crack at property tax reform.

Fresh from raising taxes on most property types, county officials say they are convening an internal working group to recommend changes to the tax code.

That group is expected to report periodically to the County Council, which Monday while meeting as the Finance Committee considered and then dropped a proposal to form its own ad hoc committee to tackle the issue.

Instead, the council intends to hold special sessions to receive reports from the administration’s group and provide input. That would allow all of the nine council members to participate, rather than a minority. Special sessions also would provide a venue for public comment.

“I think it’s very important we are involved every step of the way,” said Hilo Councilman Aaron Chung.

Council members suggested those updates be done quarterly.

Finance Director Collins Tomei said after the meeting that timing would depend on the group and its progress.

Any changes to the tax code require council approval.

According to Tomei, the group will mostly be internal and made up of county Finance staff with input also coming from the real estate sector or other organizations. For agriculture land issues, Kamehameha Schools or Parker Ranch might be invited to participate, he said.

While issues are likely to be wide-ranging, Tomei said one area that will be looked at is short-term vacation rentals, which currently don’t have their own tax classification.

Tomei said the goals, as set out by Mayor Harry Kim, are to make the tax code “efficient and fair.”

It’s not clear how long the process might take. Tomei said the idea of having it staff-led is that it can be a continuous process that won’t be limited by council terms.

The meetings won’t be required to be public, except for reports to the council.

In addition to recent gas tax hikes, the council last month approved tax increases for all property classes except affordable rentals and owner-occupied properties. Kim proposed across-the-board increases.

This isn’t the first time in recent years that the county has taken a look at the issue.

The previous council formed a Real Property Tax Stakeholders Task Force that recommended five bills to reduce loopholes to make collections more fair in 2014. That task force’s role was to find ways to implement 40 recommendations included in a 99-page property tax report from 2012.

Not all of the proposals became law.

Email Tom Callis at tcallis@hawaiitribune-herald.com.