Kauai homeowners could save $150 each from higher exemption

by Grassroot Institute of Hawaii, September 21, 2023

The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Kauai County Council on Sept. 20, 2023.
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September 20, 2023 8:30 a.m.
Kauai County Council Chambers

To: Kaua‘i County Council
      Councilmember Mel Rapozo, Chair
      Councilmember KipuKai Kuali‘i, Vice Chair

From: Grassroot Institute of Hawaii
           Jonathan Helton, Policy Researcher

RE: Bill 2901, Draft 1 — RELATING TO REAL PROPERTY TAX

Comments Only

Dear Chair and Councilmembers:

The Grassroot Institute of Hawaii would like to offer its comments on Bill 2901, Draft 1, which would increase the homeowner exemption by $60,000 and repeal miscellaneous property tax exemptions.

The Institute is supportive of increasing the homeowner exemption. Such exemptions offer tax relief targeted at owner-occupants. Increasing the exemption by $60,000 across the board — from $160,000 to $220,000 for homeowners younger than 60, for example — will assist local families in paying their yearly tax, utility, food, housing and transportation bills.

At the current rate of $2.59 per $1,000, all homeowners will save $150 per year from the additional $60,000 in exempt value. Kauai homeowners would save about $2.1 million in total.

Though this amount may not seem like much, people living on fixed incomes or who make much less than the area median income will certainly benefit from the extra $150 a year.

Likewise, we believe the repeal of various exemptions will simplify Kauai’s tax code. As the Tax Foundation of Hawaii has written, “Complicated tax rules make compliance more difficult and costly for both taxpayers and the government.”[1]

Such little-used exemptions include for individuals affected with leprosy, property used in manufacture of pulp and paper, air pollution control facilities, fixtures used in manufacturing or producing tangible personal products, and the automatic fire-suppression system.

Taken as a whole, these changes would simplify Kauai’s tax code and increase tax relief for local families.

Thank you for this opportunity to testify.

Sincerely,

Jonathan Helton
Policy Researcher
Grassroot Institute of Hawaii

[1] Tax Foundation of Hawaii, “Guiding Principles,” accessed Aug. 4, 2023.