Committee postpones vote on bill to create private‑road property‑tax credit after fiscal and staffing concerns

The Hawaii County Committee on Finance on April 15 postponed consideration of Bill 38, a proposal to create a private‑road real‑property tax credit, after county finance and tax administrators raised concerns about revenue impacts and staff capacity.

Sponsor Councilmember Connolly Kleinfelder presented the bill as an equity measure aimed at homeowners in subdivisions with private roads who already pay maintenance dues. “This is an equity issue,” Councilmember Connolly Kleinfelder said, arguing the measure would give some relief to residents who pay privately for road upkeep.

Real Property Tax Administrator Lisa Miura told the committee that her office calculated roughly 9,271 parcels that match the bill’s criteria (homeowner exemptions on nongated private roads). Miura said the “maximum loss based on 2024 values was $2,100,000,” and, using a plausibility estimate that 40% of eligible property owners would claim the credit, the county could see an annual reduction of about $842,000 (roughly 3,700 parcels claiming the credit).

Diana Nakagawa, director of finance, said the finance department had “serious concerns over our resources and our ability to get a good handle on the changes that were already made.” Nakagawa and Miura both told the committee that the Real Property Tax office lacks the staff and infrastructure to administer a new annual credit without additional positions and system work.

Miura described current capacity in the Real Property Division: nine clerical positions (two vacancies) that process approximately 5,000 applications per year. She estimated the new program could generate roughly 3,700 additional annual applications if uptake matched the 40% scenario and said “that would be for clerks alone to process” because each claim requires verification that the homeowner actually paid private road maintenance dues.

Committee members discussed options to narrow the credit (for example, capping it below $500 or otherwise limiting eligibility) and raised alternatives, including exploring state‑level income tax credits or using fuel tax revenue and other mechanisms tied to road maintenance funding. Several members expressed sympathy for the bill’s intent but concern about timing, given recent changes the Real Property office is implementing and the division’s staffing stress. “I just wanna be on record: we’re drowning,” Miura said of her office’s workload.

After discussion, sponsor Connolly Kleinfelder moved to postpone Bill 38 to allow further work with administration and follow‑up on staffing and budget impacts. The committee approved the postponement; the clerk recorded nine ayes and no nays. Connolly Kleinfelder said he will return with more refined language and numbers for a future committee meeting.

Clarifying details from the meeting included the proposal’s basic design: a property‑tax credit intended to equal the homeowner’s annual private roadway maintenance payments up to a $500 limit (the agenda language will be corrected to show $500 as a maximum, not a minimum). The credit would exclude gated developments and require a qualifying road maintenance organization (for example, a homeowners association) as the paying entity. The Real Property office recommended clearer bill language to make application and verification feasible.

The committee set a new hearing date: Bill 38 was postponed to the June 3 committee meeting. The decision to postpone means the measure will next be considered after the administration and Real Property Tax division provide additional staffing and fiscal analyses.

Votes and formal action: the committee voted to postpone Bill 38 to June 3 (motion by Councilmember Connolly Kleinfelder; second by Councilmember Dennis Onishi) with the clerk recording nine ayes.