WAILUKU - Time-share industry leaders turned out Wednesday to protest a proposal that would increase their property tax rates.
Mayor Alan Arakawa reiterated that taxpayers should not actually pay more money under his plan. Instead, the proposed rate increases are designed to be "revenue neutral" and balance out declines in property values, he said, so that the amount of tax revenue actually collected by the county would remain the same as last year.
"Some people will try to play semantic words and say, 'You're raising the taxes,'" he said. "We're not raising the taxes."
Arakawa spoke before the Maui County Council Budget and Finance Committee, which was kicking off its review of his budget proposal for 2012.
Under Arakawa's plan, only those in the "homeowner" category would see their property tax rate stay at the current level - $2.50 per $1,000 of value. Time-share units would see their property tax rates increase the most - to $19.60 from the current $14.
County officials first singled out time-share units for a higher property tax rate in 2005, saying they hoped to partially recoup lost revenues from the industry, which pays significantly lower transient accommodations taxes than traditional hotels.
Council members said they'd received an outpouring of concern from the time-share industry over the proposed property tax rate.
"My BlackBerry is almost dysfunctional with all the emails I'm getting from time-share people," said Council Member Gladys Baisa.
Time-share managers told council members the proposed rate would hurt a critical component of Maui's visitor industry.
"I'm before you today to voice our concern over the proposed property tax increases for time shares," said Gregg Lundberg of the Westin Ka'anapali Ocean Resort Villas.
He noted that Maui time-share units pay the highest property tax rate in the state, and said higher tax bills could discourage potential visitors from buying Maui time-share units, or lead to more units being foreclosed.
He called the proposed rate increase "unfair."
"Time-share properties are good employers, are good for the community and pay their fair share of taxes," he said.
Elton Sambrano of Marriott's Maui Ocean Club said time-share unit owners were already "heavily burdened" by taxes.
"Property taxes have skyrocketed at unacceptable rates," he said.
Asked to respond to the argument that rate increases would result in time-share properties paying the same amount they did last year, Sambrano said he would wait and see.
"I want to see the actual numbers come in," he said. "Then we'll see if it's revenue neutral."
Council Member Mike White said that, like other types of properties, time-share units have seen their property values decline. The result is that, under the proposed rate, the county would collect almost exactly the same amount of property taxes from time shares for 2012 as it did for 2011, he noted.
"It's pretty close to revenue neutral," White said.
