A Honolulu City Council effort to override Mayor Kirk Caldwell’s veto of a measure that would have offered active-duty service members a property tax break fell short Wednesday.
Bill 91, which would have exempted eligible members of the military from being taxed on the first $120,000 of the assessed value of their home, had passed the council on a 6-2 vote in July before Caldwell vetoed it last month.
Six votes were needed to override the veto, but only five members voted in favor of the override.
Council members Ikaika Anderson and Brandon Elefante voted for the measure in July but against the veto override.
A bill to offer property tax breaks to active duty service members died in the City Council on Wednesday. Above, Hawaii-based Marines participate in a training exercise.
“Exemptions should be needs-based,” Elefante said. “Specialized tax exemptions push the cost of the exemptions onto other taxpayers, often onto others who are already struggling.”
In a letter explaining his veto, Caldwell said service members already receive tax-free housing allowances and he thought it was unfair to provide the tax break to military service members and not to public safety personnel, including police officers.
Anderson said his office received calls from constituents who opposed the measure. There are other professions deserving of a tax break, he said, but the city could be hard pressed to offer them and continue funding core services.
Council members Carol Fukunaga, Ann Kobayashi, Trevor Ozawa, Ernie Martin and Kymberly Pine voted in favor of the override. In addition to Elefante and Anderson, council members Ron Menor and Joey Manahan voted against it.
Hansol Kang of the Hawaii National Guard Enlisted Association testified in support of the veto override Wednesday. Kang said the bill would benefit local people who are enlisted because recruits from out of state typically only stay on the islands for three years and are unlikely to buy a home.
He also stressed the importance of active duty service members in aiding natural disaster relief.
“Whether we’re traditional or full-time actives we’re still Hawaii’s own army and air force, and we stand ready for times of natural disaster,” Kang said.
It was unclear how many people would have receivedthe tax break – the city’s finance department does not track the number of active duty service members who own homes on Oahu. The department estimated an annual revenue loss of $1 million.
Martin said Wednesday the fiscal impacts were insignificant, considering that the city has more than $100 million every year in unspent funds. He also said home ownership is low among active duty service members, further minimizing the potential revenue loss to the city.
Honolulu offers all homeowners an exemption on the first $80,000 of the assessed value of their residence as long as the home is owner-occupied, so under the measure service members would have been offered an exemption on an additional $40,000 of assessed value.
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