Tax break for disabled or unemployable veterans advances

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Disabled or unemployable veterans would pay no property taxes under a bill advanced Tuesday by the County Council Finance Committee.

Bill 165, sponsored by Kona Councilman Dru Kanuha, replaces the words “totally disabled” with the term “100 percent disabled or 100 percent unemployable or both.” It also removes requirements for paying the minimum tax for those in that category, starting July 1, 2019.

Kanuha said the concept is endorsed by a property tax task force and the definition of 100 percent unemployable is set by the Veterans Benefits Administration.

“It’s not an easy thing to get that status,” Kanuha said. “I think this is a good thing to do for our veterans.”

There currently are 656 qualifying vets in the county in that category, representing $131,200 in property taxes, according to Finance Department staff.

Hilo Councilman Aaron Chung was the sole dissenting vote. South Kona/Ka‘u Councilwoman Maile David was absent.

Chung acknowledged he’s voting no at the risk of seeming like “a cold-hearted bastard.” He noted disabled veterans get as much as $3,000 monthly in tax-free benefits, more than many islanders make in their jobs.

“The lifeblood of those in elected office is the voters. … It’s easy to give things away. That’s how people get votes,” Chung said. “We’ll have to try to find the money elsewhere, because we owe it to our constituents to provide services. You take $100,000 here, $100,000 there, we have to make it up somewhere else.”

Currently, totally disabled veterans and their widows pay a minimum property tax on their primary homes of $200 annually, if the home is valued at $75,000 or more. Lower than that, tax is based on a sliding scale.

If the bill passes in two future council hearings, Hawaii County would be the only county in the state to zero out property taxes for 100 percent disabled veterans.

The measure was welcomed by East Hawaii and West Hawaii members of the state Board for Veterans Services, as well as the state Office of Veterans Services.

Jim Traxler, a West Hawaii member, said he’s spoken with various veterans organizations on the island and all support the change.

“This bill will provide additional benefits/support for a group of veterans that gave much to their country and in many cases face a lot of hurdles in their everyday lives,” Traxler said.

There are more than 121,000 veterans in the state, of which 3,075 are 100 percent disabled, said Ronald Han, director of the Office of Veterans Services in the state Department of Defense, in testimony.

“The County of Hawaii’s continued recognition and support in measures such as this one provides a lasting tribute to these veterans who have protected, sustained liberty and freedom and enabled us to live freely in this great state and nation,” Han said.

Another tax cut measure, Resolution 616 to roll back the fuel tax, was postponed until Oct. 2 by the sponsor, Kohala Councilman Tim Richards. He said the ongoing eruption of Kilauea volcano changed everything.

“That was all part of an earlier tax restructuring plan,” Richards said of a decrease in gas taxes and some property taxes to balance an increase in the general excise tax. “When the island blew up, so did the plan.”

Richards wanted to lower fuel taxes by 5 cents a gallon starting in the first fiscal year, then another 9 cents next year, bringing it to 14 cents per gallon both years when automatic increases are taken into account. Fuel taxes were raised by 6.2 cents a gallon last year, with incremental 4-cent-per-gallon increases kicking in automatically, under legislation passed last year by the council.

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.