Council hears support for proposed real property tax rates

Maui County Council members accepted oral and written testimony Tuesday on revised real property tax rates that reduced rates in some categories while retaining proposed rates in others. The Council recessed its meeting until June 3.

Final action on tax rates and second-and-final reading on the fiscal 2026 budget are scheduled for that date in the eighth floor Council Chambers.

Jonathan Helton, a registered lobbyist for the Grassroot Institute of Hawaii, testified online and said the institute supported the current proposed tax rates, which would slightly lower the tax rates for hotels and timeshares.

“We understand that the Council does have a need to raise revenue to cover the cost of projects,” he said. “On the other hand, there is a concern with a possible recession looming for the state of Hawaiʻi.”

The University of Hawaiʻi Economic Research Organization has projected that tourism arrivals could be down, Helton said.

“Further increasing the prices of visiting Hawaiʻi via higher property taxes does of course have effects on the local Maui economy,” he said. “So we realize that there’s a trade-off there, and we support what has been proposed to slightly reduce the rates from the earlier proposal.”

In written testimony, Helton said the Grassroot Institute would prefer to see no property tax increases for fiscal 2026, “especially because higher property assessments mean that tax bill will increase regardless.”

Lobbyist Dave Jorgensen, representing the American Resort Destination Association on behalf of the timeshare industry in Hawaiʻi, testified in support of the proposed tax rates, saying that they “strike a fair and equitable balance between needing to raise the taxes a bit and keeping it equitable between the different (tax) categories.”

Larry Wolfe, president of the Association of Apartment Owners for Marriott’s Maui Ocean Club timeshare resort in Kāʻanapali, submitted written testimony, saying his association appreciates the Council’s decision to dial back the proposed tax increase for timeshares to a “more modest” 10 cents per $1,000 of assessed value.

“This adjusted rate helps ensure we can continue funding essential services while also sustaining the visitor activity that supports so many local jobs and businesses,” he said.

Testifying in person, Wailea resident Faye Taylor expressed her “grave concern” about Maui County’s 2025 real property tax assessments for her one-bedroom condominium at the Wailea Grand Champions Villas. The assessments “defy market reality and impose an unfair burden on elderly owners, such as myself,” she said.

Second-floor, one-bedroom condos at the complex have been assessed this year at $1,766,500 per unit, she said, calling that a “staggering” $800,000 more than the actual sales price of another unit that was the only one-bedroom condo that sold after the Maui wildfires in August 2023.

“Current listings for similar units are all listed for $800,000 less than their assessed values,” she said. “There are systemic flaws in the assessment process which need to be addressed.”

Taylor added that 75% of the Grand Champions residents are senior citizens, “many of whom don’t have the resources or the capacity to handle the (property tax) appeal process.”

“The County’s mass appraisal model appears to ignore the economic fallout from the fire,” she said. “It’s not clear whether this is computer error or whether this was a deliberate oversight.”

Taylor noted that the Grand Champion Villas allow short-term rentals, which have come under greater scrutiny recently with Mayor Richard Bissen’s proposed phase-out of short-term rentals in apartment-zoned districts.

“Are assessments weaponized to offset county’s revenue losses?” Taylor asked. “I urge the Council to audit the methodology used for the 2025 assessments and correct assessments proactively. Adjustments must apply to all affected owners, including those that were unable to appeal.”

Council Member Yuki Lei Sugimura suggested that Taylor call the Department of Finance’s tax office for assistance with her questions and concerns. She said she tried that, once reaching one staff member who gave her a list of five appraisals.

“I have emailed her and left voicemail messages and they’re not being returned,” Taylor said. “So I have tried. It doesn’t do. And I know other owners also have tried, and they just were not getting any return calls.”

Sugimura asked for Taylor’s contact information so she can help her.

Council Member Tom Cook asked for details about the five appraisals, and Taylor said that — because there were no recent sales at the complex — the County used sales from prior year, from the “post-pandemic bubble when everything was the highest.”

In other testimony, Tom Croly expressed his deep appreciation for property tax rates set by council members for the commercialized residential category ($2 to $10 per $1,000 of net taxable assessed valuation).

“I think that you have re-established the fairness that was in place when that classification was first established 15 years ago,” he said, adding that he supports all of the Council’s proposed property tax rates.

“I do believe that there is some logic behind all of them and that you know, some people aren’t going to be happy with that logic, but you have followed a path that makes sense,” Croly said.

Regarding Taylor’s testimony and questions about real property tax assessments, he said that’s an issue the Council should examine.

When real estate activity is low, for example, only a single sale in a residential subdivision, then “that does make it difficult for real property tax to select the right assessments in those areas,” Croly said. Instead, he said the County would be better served by a three-year rolling average. “Something like that would help get rid of these spikes that happen in real property tax (assessments).”

The Council’s agenda for its 9 a.m. Friday meeting for fiscal 2026 budget bills is here.