The Hawaii County Council unanimously approved a resolution Thursday that would adjust property tax rates, but not without a profanity-sprinkled protest from one member who claimed her competing proposal was “blocked.”

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The Hawaii County Council unanimously approved a resolution Thursday that would adjust property tax rates, but not without a profanity-sprinkled protest from one member who claimed her competing proposal was “blocked.”

At issue was Resolution 574-26 — a measure authored by Chair Holeka Inaba which would increase tax rates for nonresidents and owners of second homes in a push to make up for an estimated $15 million county budget shortfall.

Lots worth between $2 million and $4 million — known as the “tier two” residential rate — would see the largest increase, rising from $13.60 to $15 per $1,000 of taxable value.

A new “tier three” residential tax rate will be rolled out for the upcoming fiscal year, applying to high-value second homes and investment properties worth more than $4 million, which the resolution sets at $17 per $1,000 of taxable value. The council established this “luxury” rate with its passage of Bill 128 on March 4 with a 5-1 vote in favor.

Another new property class created this year would be “long-term rental,” set at a rate of $7.75 per $1,000 of taxable value, which council members have justified as an incentive to encourage second-home-owners to rent their properties to residents at reasonable rates. This new class was created with the passage of Bill 104 in 2024.

Simultaneously, many Hawaii Island residents would see a slight reduction in their property taxes under the proposal. Most owner-occupied homes and affordable rental housing would enjoy a 20-cent reduction — or just over 3% — in tax rates, falling from $5.95 to $5.75 per $1,000 of taxable value.

This is an intentional tailoring of rates by council members to benefit locals, whom many county officials have admitted are reckoning with a runaway cost of living and housing affordability crisis.

Thursday’s sparring between council members stemmed from Hilo Councilwoman Jenn Kagiwada’s submission of a similar resolution last week that called for also increasing the “tier one” residential tax rate, which applies to properties worth less than $2 million — the vast majority of them being nonowner-occupied.

The “tier one” rate would grow from $11.10 to $12.10 per $1,000 of taxable value under her plan. It would also raise tax rates for apartment-class properties from $11.70 to $12.10 per $1,000 of taxable value. Kagiwada co-introduced both Bill 104 and Bill 128.

These two extra tax class hikes would result in approximately $30 million in additional county tax revenue, while Inaba’s proposal would bring in an additional $18 million.

Last week Kagiwada requested a “breach” of time constraints for her proposal, which she had been refining over several years, from Inaba — a common practice during budget season.

She said in an email to the Tribune-Herald that Inaba denied her breach request, yet still moved to grant his own plan a breach, resulting in only his proposal being included in the agenda for Thursday’s meeting.

“I think it’s a huge mistake not to address both tier one of the residential rate and the apartment tax class,” she said at the meeting. “I think it would be a mistake not to use our real property taxation authority to incentivize the behaviors we want to see and disincentivize those that we don’t. I did introduce a resolution that has some significant differences that was not put on this agenda … there are significant differences including major revenue differences.”

She reconstructed her proposal as an amendment to Inaba’s resolution, but copies of it has not been provided to council members by the time the meeting started. She asked them to be patient, offering to briefly explain the differences between the two proposals.

Hilo Councilman Dennis “Fresh” Onishi — who assumed the chair from Inaba in order to deliberate on the measure he authored — questioned Kagiwada if she was attempting to stall for time.

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“So, with the discussion, Ms. Kagiwada, you’re using it to kind of delay for the amendment or what?” Onishi asked.

“I’m not using it to delay on the amendment,” Kagiwada responded. “I was just going to talk about (it) because people don’t know what the other possibilities are, and I was basically blocked from bringing my resolution to this body on this day by the chair. … I would like to at least discuss what is in mine.”

She motioned to table discussion of Inaba’s resolution until her amendment arrived. The vote was 2-6 opposed, and the motion failed.

Kagiwada then called Real Property Tax Administrator Lisa Muir to sit before the council, asking her questions about what types of properties were included in the apartment property class.

After a brief back and forth, Onishi declined to allow Kagiwada to ask further questions.

Puna Councilman Matt Kaneali‘i-Kleinfelder praised her effort, but said that since the amendment was not available yet he was making a motion to “call for the question” — a maneuver used to end debate and force an immediate vote.

“The intent — admirable,” Kaneali‘i-Kleinfelder said. “(But) just to clarify process within council services, there was a few days of time to have an amendment ready. It’s not in front of us today.”

Kagiwada struck back, saying her efforts were being stonewalled.

“I’m very frustrated,” she said. “I just want to say: I feel like I’ve been blocked from speaking, I’ve been blocked from sharing my work.”

Kaneali‘i-Kleinfelder then called for a point of order, which Kagiwada interrupted by saying about her amendment, “they said it’s ready, and they’re just not locking in. I don’t understand.”

“A point of order is nondebatable, and I’ve called for the question,” he said. “That’s nondebatable, thank you.”

Onishi then asked the county clerk for a roll call vote on Kaneali‘i-Kleinfelder’s motion.

“Are you f***ing kidding me?” Kagiwada whispered to herself, but loud enough for the podium mic to pick up.

The motion failed, allowing the discussion to continue.

Inaba spoke next, and offered a justification as to why he did not allow Kagiwada’s proposal to move forward.

“Maybe to clarify the record: I did not grant a breach for the secondary resolution,” he said. “We have our procedural mechanisms by which we can amend a single resolution to get us to where we need to be, so that is why we have just one resolution before us today and not two. It would be far more confusing to be trying to amend potentially two resolutions that essentially accomplish the same thing of setting tax rates.”

Before Inaba could finish speaking, a county clerk walked into the chamber and distributed Kagiwada’s amendment to each member, who ended up voting 2-6 opposed.

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Email Stefan Verbano at [email protected].