UPDATED 10:00 a.m. — 9/29/10

U.S. Rep. Charles Djou doesn’t like taxes.

In his nearly 10 years in public office, he says that he has never voted to raise a single one.

That claim can be found on Djou’s campaign website where the Republican congressman says, “I have never voted for a tax increase.” See below.

But is it possible that in almost a decade of public service, in the state House, the Honolulu City Council and now, the U.S. House, that Djou never voted for an increase.

It sure seems like it — with one caveat, which you’ll find at the end of this Fact Check.

Civil Beat went through his votes on bills from his tenure in the City Council, as well as the state House and Congress. We found just one procedural possibility, but nothing of substance.

It came in 2005’s Bill 17, when Djou was a councilmember. The bill, “AN ORDINANCE TO AMEND CHAPTER 41, ARTICLE 17, OF THE REVISED ORDINANCES OF HONOLULU 1990, RELATING TO MOTOR VEHICLE WEIGHT TAX,” called for an increase to the “motor vehicle weight tax by one cent per pound for passenger, trucks, noncommercial and commercial vehicles.”

Djou voted to pass the bill in its first reading, but then voted against it on the second and third reading.

While technically, this does count as a vote for a tax increase, generally speaking, voting for any bill on first reading is considered a common courtesy.

“I would guess, on most of these bills, he would vote in favor – definitely on first reading, because that’s really all just pro forma, and then a lot of times, maybe even on second reading… But then it comes down to actual passage is third reading, and so, that’s the one that really counts,” Council Chair Todd Apo told Civil Beat.

So, while occasionally technicalities make all the difference, in this case, Djou wasn’t really voting for a tax increase. From what we have been able to find, it seems that Djou has indeed, never voted for any legislation that would increase the tax burden on citizens.

UPDATE

A reader raised a valid question about our grade, drawing our attention to Resolution 06-079 from 2006 as evidence that Rep. Djou did, in fact, vote for a tax increase.

Here’s what happened. On June 7, 2006, the Council voted unanimously, with Djou among the members, to set new property tax rates. At that time, it raised rates on commercial, hotel and resort properties. But it lowered the rates for residences and apartments.

The 2006 rate for improved residential properties and apartments went down from $3.75 to $3.59 per $1,000 of assessed value. But the rates for commercial, hotel and resort properties went up from $11.37 to $11.97.

So, yes, Djou did vote to increase taxes on some properties. But an evaluation of the overall impact of the vote shows that it lowered taxes.

Civil Beat compared the total revenues collected from property taxes in 2005 ($581,801,000) to those collected in 2006 ($718,090,000), an increase of 23.4 percent. However the valuation of properties for tax purposes increased more than the revenues collected, 28 percent.

The tables below represent our findings.

2005 Real Property Tax Valuation (In Thousands of Dollars)

Land Use Class Gross Valuation Valuation for Tax Rate Amounts Raised by Taxation
Improved Residential $78,968,241 $68,475,274 $256,782
Apartment $28,677,469 $24,671,194 $92,517
Commercial $11,195,646 $9,618,183 $109,359
Industrial $5,258,767 $4,972,434 $56,537
Agriculture $876,153 $735,975 $6,307
Vacant Agriculture $55,217 $33,867 $290
Preservation $420,501 $363,128 $3,475
Hotel/Resort $5,051,457 $4,708,327 $53,534
Unimproved Residential $1,011,883 $524,508 $3,000
Public Service $514,540 ($9) $0
Total $132,029,874 $114,102,880 $581,801

2006 Real Property Tax Valuation (In Thousands of Dollars)

Land Use Class Gross Valuation Valuation for Tax Rate Amounts Raised by Taxation
Improved Residential $101,177,778 $89,283,029 $320,526
Apartment $36,995,719 $32,642,928 $117,188
Commercial $12,736,077 $10,814,805 $129,453
Industrial $5,858,393 $5,513,282 $65,994
Agriculture $1,087,068 $875,793 $7,506
Vacant Agriculture $61,965 $38,547 $330
Preservation $423,136 $365,292 $3,496
Hotel/Resort $6,220,529 $5,787,719 $69,279
Unimproved Residential $1,362,774 $754,815 $4,318
Public Service $596,666 ($1,300) $0
Total $166,520,105 $146,074,910 $718,090

Percent Changes Between 2005 and 2006

Gross Valuation Valuation for Tax Rate Amounts Raised by Taxation
+26.1% +28.0% +23.4%

In 2006, citizens did pay more taxes, but their properties were worth more money so they actually ended up paying less as a percentage of the value of their property.

Civil Beat spoke with Rep. Djou, who expanded on this.

“I have always consistently taken the position against raising taxes,” Djou said. “It is my philosophy and my belief that by keeping tax rates steady and low, the government over the long-term actually yields more money because you have a booming, growing economy and low unemployment.”

“What happened (in 2006) was that the Hannemann administration proposed a change in rates – I did not like that, I would have preferred we just cut rates – to increase the commercial property tax rate and simultaneously decrease the residential tax rate. The result was that instead of, hypothetically, revenues going from $300 million to $375 million if you kept the rates static, the revenue increase went from $300 to say, $360 million. So it was a net tax cut.”

Djou said that even though it wasn’t his favorite choice, he voted for the measure because it would ultimately mean less taxes for citizens.

In fact, Djou proposed an amendment to cut residential tax rates and not increase the commercial taxes, but it was defeated in the budget committee process.

“You don’t vote on what you want, you vote on what’s on the floor,” Djou said. “And what was on the floor was to accept these rates or not and I voted in favor of it because it was a net reduction of taxes.”

Did Djou vote on a measure that increased property tax rates in 2006?

Yes.

But did those tax rates necessarily equate to a tax increase?

No.

But it should be acknowledged that there are other ways to look at this issue.

No. 1 — Clearly, Djou’s vote helped increase the taxes paid on certain properties. So his unequivocal statement that he has never voted for a tax increase has a flaw.

No. 2 — The measure he voted on did increase city property tax revenues by 23 percent. It could be argued that any measure that increased revenues at all, or beyond inflation, is a tax increase.

The bottom line, though, is that his vote resulted in lower tax revenues collected by the city than had the council kept the rates static.