The Committee on Finance, chaired by Vice Chair James Eustace, met on February 4, 2026, at 9:00 a.m. in Hilo chambers. The primary agenda item was Bill 128, which proposes a new residential tier three real property tax classification for properties with a net taxable value over $4 million. The committee heard public testimony, discussed the bill, and voted to forward it to the full council with a favorable recommendation.
Bill 128 – Real Property Tax: New Residential Tier Three Classification
Aloha, good morning. Welcome to the 28th session of the Committee on Finance. I am your vice chair and presiding officer for today, James Eustace. We are in the Hilo chambers. It is 9 a.m. We are joined by Councilmembers Kimball, Inaba, O'Nishi, Kirkowitz, and Kalgiwana. Councilmember Viegas will be joining us shortly. At the moment, we are absent with Councilmembers Kalimbo and Connelly Kleinfelder. Mr. Clerk, if you could start us off with any testifiers. Thank you so much, Chair. Just noting that we do not have any testifiers at a remote sites. We do have two here at our Hilo chamber. The first of which is Corey Harden to be followed by Tanya Yamanaka Anasazian, both testifying on Bill 128. Corey, when you're ready to begin, you can press that button at the base of the mic to turn it on, introduce yourself, and you'll have three minutes. Council members, Corey Harden in support of Bill 128 regarding property taxes. And continuing, if the county has adequate money in its coppers, it can afford to do all the things that makes a community a place where people want to buy a house or land worth over 4 million, even if they're not going to live here. It means the county can provide roads, emergency services, food treatment, drinking water, and so forth. There are some scary statistics from UHER across states. Each 10% increase in home prices correlates with a 10% increase in the rate of homelessness. Also, Hawaii's rate of homelessness is more than twice the national rate. And Hawaii is the most expensive state in the nation for housing. Off island investors seem to be driving at least partly the high cost of housing. Civil Beat found that people from out of state made up 13% of property owners on Oahu, almost one third on Maui, and more than half of the property owners in Lahaina had an out of state mailing address. So of course, some difficulties can arise, unattended consequences from higher taxes. I got some ideas from Chat GBT, so that's a place to start, not reliable, but a place to start researching. Sometimes landlords will just sell their property or not build in the first place. But you could exempt or discount purpose-built rental buildings, or you could lower rates for long-term rentals versus short-term or vacant homes. Sometimes owners will raise rents to offset the tax, but you could offer tax credits for landlords who keep rent growth below a benchmark. Sometimes people inherit a very expensive home that they didn't expect to. You could allow tax deferral until the home is sold, or have income-based caps. Sometimes people get stuck with an expensive home because of job relocation, or maybe they had to move temporarily to care for a relative elsewhere. So you could allow temporary exemptions. So in conclusion, Bill 128 offers a viable path toward addressing our critical housing issues, and there are ways of dealing with the difficulties that may arise. Thank you so much. Our next testifier is Tanya. Tanya, when you're ready to begin, you could just introduce yourself and you'll have three minutes. Aloha, good morning. And I'm testifying here in person because that's how important I think this bill is. I want to thank the introducers. I'm part of the Hawaii Tax Uh Fairness Coalition, and I strongly support Bill 128 because it continues to shape and form a tax system that's fair, it's more balanced, and it's responsible. I know how we get our money as the county. Property taxes is huge. There's also a bill out there just floating around in the state. I don't remember the number. I'm pretty sure councilwoman Kaguana knows it. Amy Prusso introduced it, and it's threatens our ability as a county to have the sole proprietorship over the county uh property taxes. This bill, though, um is really smart because it replaces the old two-tier, which is new, with a three-tier, and it targets the high-value non-owner occupied residential properties. These are the people that we need to um get more money from. We need to really work the tax system to shape the behaviors that we want so that we can have a more affordable Hawaii.