Maui has long derived a significant portion of its revenue from property taxes. As the real estate market was booming, the county lowered tax rates as assessed values increased drastically. As property values have decreased, the county has been reducing assessments leaving the potential for budget short falls. As a result, the county has had to revisit tax rates. We saw modest increases in tax rates across most property classifications for the 2010-2011 fiscal year. The goal of the tax rates wasn’t to increase revenue so much as to keep the revenue neutral from year to year. When new mayor Alan Arakawa released his proposed budget in March, he had marked a number of property classifications for significant rate increases. According to today’s Maui News, the mayor has lowered a number of the proposed tax rate increases after the county received fewer appeals than anticipated for tax assessments.

Here is a list of some of the new proposed rates:

• Timeshares are currently $14 per $1,000 of assessed value. In March, the Mayor proposed an increase to $19.60 per $1,000 of assessed value. He has revised that number to $15.45.
• Residential rates are currently $5 per $1,000 of assessed value. In March ,the mayor proposed $5.55 per $1,000 of assessed value. That numbers was revised down to $5.00
• Apartment rates are currently $5 per $1,000 of assessed value. The mayor proposed an increase to $5.75 per $1,000 in March. The new number as of yesterday would be $5.70
• Hotel/resort rates are currently $8.30 per $1,000 of assessed value. The mayor proposed an increase to $9.35 per $1,000. He was lowered the new number to $9.10.

The mayor did not revise all of his proposed tax rates downward. A handful remained unchanged and he proposed an increase to one property classification. Here are those rates:

• Commercial residential is currently $4.00 per $1,000 of assessed values. The mayor is sticking with his proposal to raise rates to $4.20 per $1,000 of assessed value.
• Agricultural zoning is currently $5.00 per $1,000 of assessed value. The mayor plans to increase the rate for ag to $5.80 per $1,000 of assessed value.
• Homeowner tax rates are to remain unchanged at $2.50 per $1,000 of assessed value.
• Conservation is the one category of property that the mayor proposed an additional rate increase on yesterday. The rate for this classification is currently $5 per $1,000 of assessed value. After proposing a rate of $5.60 in March, the mayor proposed an additional increase to $6.10 yesterday.

The mayor’s proposal will now go before the county council’s budget and finance committee. We should learn whether these rates are approved sometime in the next few weeks. We will keep you updated on The Maui Real Estate Blog.