The Honolulu City Council has established a special subcommittee to investigate certain matters relating to real property taxation issues.

The Council voted unanimously April 19 to create a Permitted Interaction Group, or PIG, composed of four Council members: Chair Tommy Waters, Vice Chair Esther Kia‘aina, Radiant Cordero and Matt Weyer. The four are expected to sort through a slew of largely Council-­initiated real property tax measures that variously offer tax credits, tax exemptions or other means to aid homeowners affected by the approximately 10% or greater increase in real property assessments on Oahu.

A few of those measures — co-introduced by Waters and Cordero, who presides over the Council’s budget committee — include helping low-income kupuna; helping homeowners who were placed into a higher rate-paying real property tax class; and those renting properties long term — for 12 months or more. Other tax measures introduced in 2022 would increase the homeowner’s exemption, revise tax classifications or apply a vacancy tax.

“The Permitted Interaction Group will look at all of the bills, and, at least for me, it will determine the strongest bills that we may be able to pass to provide the best relief,” Cordero previously told the Honolulu Star-Advertiser.

The Council’s stated tax relief measures coincide with Mayor Rick Blangiardi’s one-time $300 tax credit to nearly 152,000 qualifying homeowners, as part of his proposed $3.41 billion operating budget for next fiscal year. The rebates — funded in the mayor’s budget for a total of about $45.5 million — would be granted to those with an active home exemption on their 2023 assessments, regardless of property value.

“If passed by council, the mayor’s one-time tax credit of $300 for all taxpayers with the homeowners’s exemption will take effect on July 1, 2023 because it was a part of the mayor’s (fiscal year) 2024 proposed budget package that was submitted on March 2, 2023,” Ian Scheuring, the mayor’s deputy communications director, told the Star-Advertiser via email, before the meeting.

Outside of the mayor’s one-time tax credit, he said any tax measures the Council approves will take much longer to implement.

Scheuring said for a proposed ordinance to have the effect of law, it must pass three readings during scheduled full City Council meetings, within a two-year period. He noted proposed ordinances automatically terminate at the end of the second year from the date of the measure’s introduction, which means it could take a minimum of three months to pass any new real property tax ordinances.

“But complex and/or contentious legislation can take as long as two years for adoption or may never be adopted at all,” he said.

According to Cordero, the work of the Council’s real property taxation PIG will continue well beyond the city’s latest budget cycle.

“And although these real property tax bills don’t affect our budget (now), I do want to ensure that we are looking at our current budget proposals to provide enough support for our Department of Budget and Fiscal Services to be able to start standing up these programs for real property tax relief,” Cordero said.

Meanwhile, she said the $45.5 million earmarked for the mayor’s one-time, $300 tax credit does not go far enough. “Of course, we can give that, but what’s our long-term sustainable tax relief? … There needs to be a plan for reform,” she added.

Once studied, the PIG subcommittee is expected to present a written report of its findings and recommendations to the Council at a future meeting date. Upon submission of that report to the Council, the PIG panel dissolves.

During the April 19 Council meeting, no one from the public spoke regarding the new subcommittee. However, two people filed written testimony on the matter.

Ivan Kaisan, a former assistant director to the city’s Office of Council Services, offered two points about the local property tax system.

“The property tax system is fundamentally biased against taxpayers,” Kaisan wrote, adding that “the interests of the mayor and council are opposed to the interest of taxpayers.”

Kaisan added, “Taxpayers know that if the mayor and council do nothing, taxpayers would be hit with substantial tax increases. In contrast, the mayor and the council enjoy at least the prospect of windfall revenues to balance the budget.” He said this “windfall affords the mayor and the council to compete over how much to give back to taxpayers in the form of lower tax rates, or higher tax credits and exemptions, all the while taxpayers squirm awaiting the outcome. That is a major reason why property taxes are the most reviled form of tax.”

Kaisan said a “fair tax system” would keep tax bills more or less unchanged unless an “increase was proposed, debated, justified and approved. … Whatever you do this time, please address the issue openly and honestly.”

Natalie Iwasa, a certified public accountant, commented that she was dis­appointed to see “this resolution wasn’t amended to include real property tax exemptions” other than the ones currently in bill form before the Council.