© 2023 Hawaiʻi Public Radio
Play Live Radio
Next Up:
Available On Air Stations

Honolulu City Council questions Blangiardi's budget and tax credit proposal

Casey Harlow / HPR

A new bill would provide a $300 credit to homeowners receiving a home exemption from the city. That would help roughly 152,000 households — and would cost the city $45.5 million.

Mayor Rick Blangiardi announced his credit proposal, Bill 14 (23), as part of his administration's FY24 budget. Blangiardi submitted a $4.5 billion budget, consisting of $3.4 billion for operating costs and $1.06 billion capital improvement budgets. The operating budget is a 6.3% increase from the previous year.

"We understand that the two years of assessment increase has been unusually high, and perhaps the aberration in the second year," said Andy Kawano, the director of the city's budget and fiscal services department.

"As a result, the Blangiardi administration strongly feels that we needed to provide a one-time tax credit that can go into effect next fiscal year," Kawano said.

But councilmembers raised concerns about the credit during a special budget committee hearing Thursday. Specifically, asking about what the credit could mean for some property owners and renters.

Windward Oʻahu councilmember Esther Kiaʻāina said recent reclassifications of properties impact homeowners who are land-rich, but cash poor. They may no longer be eligible for the credit.

Another concern is the impact on renters. The credit would not apply to homeowners with multiple properties, who will likely see an increase in their property tax assessments in the future.

"I am concerned about long-term renters that landlords will just pass along the increased property taxes to renters, many of whom may be more vulnerable than homeowners," Kiaʻāina said.

"If this property valuation increase is just a one-year fluke, and we see property values go down next year, the property tax credit may mitigate impacts to landowners but not renters," she continued.

Kiaʻāina noted landlords aren't likely to lower rents after increasing them.

The credit is part of the administration's effort to address ongoing challenges, such as housing and infrastructure.

Leeward Oʻahu councilmember Andria Tupola supports the intent of the proposed credit and initiatives, but urged caution.

"I did feel like the administration asked for a whole lot, which today might be okay. But in the future is going to equal tax increases, which we can't have," said Tupola.

"We can't talk about a $300 benefit to the residents without helping renters, and without making sure that we're not creating a problem further down the line."

Budget committee chair Radiant Cordero introduced proposed amendments that would slash the administration's proposed operating budget by $214 million.

"This year, we have seen a 14.1% increase in assessed valuations for real property," said Cordero. "With such a significant increase, we need to seriously consider the impact to our residents."

Councilmembers advanced Bill 14 to a second reading. The budget committee will discuss the administration's proposed budget next month.

Casey Harlow is an HPR reporter and occasionally fills in as local host of Morning Edition and All Things Considered. Contact him at charlow@hawaiipublicradio.org or on Twitter (@CaseyHarlow).
Related Stories