May 12, 2020
Honolulu is making a change to the way it handles property tax bills, in order to make it easier for businesses and people who have been affected by COVID-19. The second half of the bill will now be able to be paid in four installments, instead of just one. Normally, Honolulu property tax payments are due in February and then again in August. But this year’s August payment can be paid in August, September, October, and November. That way people don’t have to come up with as much money all at once, especially when they might not have been recovered financially from the issues caused by the pandemic.
According to Mayor Kirk Caldwell, working with the public on the challenges faced in times of crisis and emergency is important to the city. In a recent press conference, Caldwell talked about that issue and about how every property owner would have a “coupon” included with their August bill for property tax. They won’t need to prove a hardship to qualify, and there won’t be any interest or penalties for people who take advantage of the spread-out nature of the payments. Taking the extra time is not required, though, if an individual or a business wants to just pay the tax due in August, as one payment.
A resolution was introduced by City Council members supporting the extension, but the city administration already has the authority to take action regardless, said Budget Director Nelson Koyanagi. But officials with the city did make it clear that the plan wasn’t forgiveness of the property taxes, which still have to be paid. It’s only a deferral, to help people get through difficult times if they’re struggling to pay a large second-half tax bill in August. The city will also be open to working with people and businesses who fall behind on their property taxes, but foreclosure could still eventually happen to those who fail to catch up on their taxes or make payments.
That wouldn’t be something that would happen quickly, as long as the property owner is working with the city to try to solve the problem. The properties are seen as collateral for the taxes, and property tax is the main source of revenue for the city. Because of that, payments are deemed essential for the city to continue providing fire, police, parks, facility maintenance, ocean safety, and homeless support, along with housing, Hand-Van, and bus operations, and other important services. The city’s facing a big shortfall of $130 million in the upcoming fiscal year, beginning in July.
Reduced revenue has been seen with the island being shut down, and that includes a lower amount of parking fees, vehicle registrations, and vehicle weight taxes. In order to get the budget balanced, officials have cut $135 million from the mayor’s proposed budget. These cuts were mainly in transportation and included bus, Handi-Van, and rail operations. Federal funds will be able to help make up for Handi-Van and bus shortages, but not for rail issues. Vacant positions offered by the city were cut substantially, as well, and agencies will be hiring new people only by using savings that they can create within their departments.
If the assessed values of the property in the area fall, the city could take another hit with a lower amount coming in from property tax. The biggest goal now is for the city to find ways to help businesses and individuals who are struggling with their tax burdens, and to help businesses that need funds to stay afloat during this difficult time. It’s not easy for anyone, but Honolulu property tax deferment will help in the short term.