Wednesday, April 21, 2010


HAIRY PLUGS: You’ve gotta see yesterday’s long delayed non-discussion of county furloughs during yesterday’s county council’s budget hearings to believe it- or you can read the rather boring, dry account that has become the hallmark of new government beat reporter Léo Azambuja in the local newspaper.

But while defender of the realm Councilperson Darryl Kaneshiro- who well may be the first councilperson ever to be voted out of office for a second time this November- did his best to usher in the age of nefarious and keep the sunshine out by screaming down Tim Bynum and Lani Kawahara when they wanted to discuss the Mayor Bernard Carvalho’s furlough-dependant budget, we have no idea where the two dissidents were going with the discussion.

Because the real issue isn’t fiscal its political.

Many people ask us why we don’t run for office. The answer is simple- we believe in more government regulation and higher taxes. Who’s voting for that?

In this case, after services have been cut well into the bone at both the state and county levels, only a handful of screamin’ meemie wing nuts are actually asking to cut essential government services further.

In the case of the county raising the real property tax rate it seems like a no-brainer to all but the “where’s my free lunch” crowd.

For the uninitiated, counties in Hawai`i are given only one way to tax people- through real property taxes.

Each year two things happen at budget time. First the real property division office adds up the assessed value of all properties on the island. Then the mayor proposes a tax rate which when multiplied by that amount yields how much revenue the county can expect to take in.

That amount must at least balance with the expenditures in the budget.

For years, as valuations have skyrocketed in the housing and real estate market, a handful of people have screamed about their property taxes doing the same. But the council, in a political move that everyone recognized as disingenuous double talk, has claimed that they didn’t raise the property tax “rate” while the budget practically doubled.

And of course technically they were right- although revenues have almost doubled the “rate” remained the same.

So now that the bottom has dropped out of the assessment side of the equation the revenues have plummeted too- only the tax “rate” remains the same in this budget.

The system was set up so as to use the rate as a tool to balance the budget. When assessments are up, the rate goes down. As assessments go down the rate should go up.

Only the council has played this little “I didn’t raise your taxes” game for so long that the “big lie” has worked and people only look at the rate to tell if their taxes are going up. In reality if they were to raise the rate to require that people pay only what they paid last year- or even an average of the last few years- there would be no need for furloughs or vacant or dollar funded positions which are bringing the wheels of county services to a halt, according to those who provide and use them.

In the 90’s and early ‘00’s famed original “nitpicker” and activist-supreme Ray Chuan made sure to mention this at every opportunity making it an issue that eventually led to an ordinance that set a 2% cap on actual yearly real property tax payments. It came as a result of the pressure of the “`Ohana charter amendment” a few years back that, although it was struck down by the state supreme court, was. in part. implemented by the council.

People, notably then councilperson Joann Yukimura, warned at the time that when the boom ended and the bust came it would only take as little as one year of lowered payments to cause revenues to go so low that the mechanism for raising revenue in the charter- upping the rate- would be ineffective to fund essential county services.

That’s essentially why the supreme court ruled as they did.

This is that year, although the trend started last year. If the rate is not raised to account for the decreased assessments this year- and probably again next year and maybe the year after too- eventually we will get to a point where, assuming the housing bust continues, no matter what we do we will never be able to fund essential services like fire, police and life guards.

The list of similar repercussions is endless.

Though furloughs are the most visible “cut” in this year’s budget we’re also delaying hiring and maintenance of things like equipment and roads that will exponentially catch up with us very soon- especially if we can only raise tax payments two percent a year after they’ve suddenly dipped 10 or 20 percent.

It’s time to raise the real property tax rate and put an end to all these idiotic penny-wise and pound-foolish cuts. But that will take political will and courage especially in an election year- something that has traditionally been in short supply on Kaua`i.

No comments: