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Time share property tax rate dominates Lahaina budget hearing

April 21, 2011
LAHAINA — The room seemed full to capacity with over 200 in attendance at the County Council’s Budget and Finance Committee’s April 13 hearing seeking West Maui residents’ comments on the Fiscal Year 2012 Maui County Budget.

Almost half of the crowd at Lahaina Civic Center was there to either testify or show support for those opposed to the Timeshare Property Tax increase of $14 to $19.60 per $1,000 in value, as proposed in the budget Mayor Alan Arakawa has sent to the council.

Daniel Dinnell spoke on behalf of ARDA-Hawaii, the local chapter of the American Resort Development Association, a national timeshare association comprised of 20 local members with 45 properties statewide and 22 in Maui.

Dinnell testified, “As ARDA-Hawaii has previously testified, following a 69 percent increase to the real property tax in 2005, the timeshare industry is again being singled out with the largest single increase of $5.60.”

Representing Marriott’s Maui Ocean Resort Club on Maui, Rob Welch pointed out that “… our property taxes have increased by $6 million between 2005 and 2010.”

“Our timeshare owners are already heavily burdened with the highest property tax rate at $14 per $1,000. An increase of 40 percent, to $19.60, will have an immediate negative impact to our owners and our associates,” he said.

Welch noted, “Our resort employs a staff of 480 local residents… in 2010, the total payroll, including benefits and taxes, were over $30 million; money spent in our local economy.”

Gregg Lundberg, general manager of The Westin Kaanapali Ocean Resort Villas, a mixed-use timeshare property, began his testimony by “recognizing the discomfort caused by the e-mail campaign that many timeshare owners sent as they struggle to have their voices heard.”

“However,” he pointed out, “it’s important for all of us to realize that these owners stand to be tremendously impacted by the outcome of your deliberations and can no longer sit idly by as they are seemingly taken advantage of, because they are not Hawaii residents.”

Michelle Rose Abad, a 2009 graduate of the School of Travel Industry Management at the University of Hawaii, spoke in support of those opposing the timeshare property tax proposal.

“I know firsthand the effects of scarce job opportunities on our community, as my family was also affected during that downturn. Although being fortunate enough not to be laid off, my mother, who had been employed by a respectable resort in Wailea for over 20 years as a housekeeping supervisor, was not offered full-time hours due to then low occupancies at that resort.”

“I feel that increasing the Timeshare Property Tax as part of the 2012 budget will hurt the growth of the positive benefits that ownership brings to all of us here on Maui. It will force our current owners to sell or foreclose on their timeshares. The effects, in turn, will place our employment, our health benefits, our retirement benefits and everything else that allows us to maintain a comfortable lifestyle on Maui in jeopardy,” she told the council’s budget committee.

In response to an inquiry by the Lahaina News on the county administration’s position on the timeshare tax controversy, Budget Director Sandy Baz responded: "Proposed tax rates for 2012 were adjusted to compensate for the continued decline in property values for each classification except for the homeowner class, so that revenues remain fairly neutral. The administration is supportive of adjusting the final tax rate for all classifications, including the time-share classification, after the certification of real property values on April 19th.”

This battle will not be settled until the council adopts its final version of the budget, but the administration’s statement appears to signal that there may be room for compromise.

While it may have dominated the discussion, the timeshare property tax issue was not the only message delivered at the meeting.

May Fujiwara, president of the Lahaina-Honolua Senior Citizens Club, testified on behalf of the club in support of MEO’s Kahi Kamali‘i Infant Toddler Center and the Head Start afternoon and summer programs on Maui and Molokai.

She also spoke in support of MEO’s Youth Services programs, Youth Transportation, MEO’s Senior Leisure and Nutrition Transportation and the organization’s medical transportation services that take individuals to and from medical appointments and dialysis treatments.

Fujiwara expressed strong support for $21,000 for LahainaTown Action Committee to help with Boat Day entertainment when cruise ships arrive at Lahaina Harbor, and for restoring $200,000 in the mayor’s budget for the Aging with Aloha program to continue its work to prepare for an aging population and the shrinking workforce to care for them.

Eighteen-year-old Forest Rezayani of Kahana delivered one of the evening’s most courageous and dramatic testimonies, when he asked for continued support of the MEO rental assistance program. He told of how his mother had been laid off, and they began to have difficulty in making their rent and buying food.

Gradually, as things got worse, they were struggling to avoid losing their apartment. With the prospect of becoming homeless, he saw that his mother was losing weight. He began to realize that she had been feeding him with most of the food they could afford to buy and only taking a small portion for herself.

They found MEO and received help.

“We came really close to be evicted,” he said. “The assistance was pivotal. Please continue this program, so that it can help other families like us.”

Article Photos

May Fujiwara, president of the Lahaina-Honolua Senior Citizens Club, testified in support of MEO programs, LahainaTown Action Committee’s Boat Day greetings and the Aging with Aloha Coalition before the County Council’s Budget and Finance Committee. Photo by Tom Blackburn-Rodriguez.



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