Hawaii County Council Special Meeting: Property Tax Rates & Budgets – May 21, 2026
Hawaii County Council Special Meeting: Property Tax Rates & Budgets – May 21, 2026
The Hawaii County Council held a special meeting on May 21, 2026, in Hilo to adopt real property tax rates for FY 2026-2027 (Resolution 574-26) and conduct the first reading of the operating budget (Bill 135) and capital improvement budget (Bill 136). The meeting convened at 9:05 a.m. with eight members present (Councilmember Kimball excused on county travel). After an invocation and public testimony, the council debated and passed the tax rate resolution, then amended and advanced both budget bills toward a second reading on June 4, 2026.
Public Comments & Testimony
- Candy Mopuaka (Pahoa district) testified on the bus system, urging the council to restore hourly service (currently every two hours) to accommodate working-class commuters, students, and disabled individuals. She also requested free passes for kupuna (elders) and students, noting that the community is willing to support the system through fare purchases. She emphasized the growing population of Puna and the inadequacy of the current service.
- Dwight Vicente (representing the Hawaiian kingdom) argued against the county’s taxation of lease lands, citing the 2004 state Supreme Court ruling State v. Gima which he said limits taxation to ceded lands only. He called for enforcement of that ruling to stop taxation on private leasehold lands.
Discussion Items
Resolution 574-26: Real Property Tax Rates for FY 2026-2027
Councilmember Inaba introduced the resolution, proposing:
- Lower the affordable rental housing classification rate from $5.95 to $5.75 per $1,000 net valuation (a 3.3% reduction).
- Lower the homeowner classification rate similarly from $5.95 to $5.75.
- Increase the residential tier two rate from $13.60 to $14.50.
- Set the new residential tier three rate at $17.00 and the long-term rental rate at $7.75.
Finance Director Diane Nakagawa explained that the proposed rates would generate approximately $17 million more in revenue than the mayor’s original budget assumptions, helping to prepare for expected debt service deficits in FY 2028 and FY 2029 (projected at $15.3 million and $44 million, respectively). Mayor Alameda submitted a communication in support of the resolution.
Councilmember Kagiwada, who had been working on a more progressive tax plan for three years, moved to postpone the resolution to allow consideration of her alternative proposal, which would generate $30 million in revenue (versus $17 million) by also adjusting residential tier one and apartment tax classes. The motion to postpone failed (2-6).
Councilmember Kagiwada then offered an amendment to substitute the contents of her alternative resolution (via Communication 905.3), which kept some of Inaba’s rates but increased tier one, tier two, and apartment rates, and set the long-term rental rate at $7.65 (matching the mayor’s proposal). The amendment was defeated (2-6).
After debate, the main resolution was adopted 8-0. Councilmember Galimba voted against, citing process concerns about not considering all proposals together.
Bill 135: Operating Budget (First Reading)
The council heard no additional public testimony. The mayor’s amended draft two (Communication 754.7) was adopted, increasing estimated revenues from $966.9 million to $976.4 million and appropriations to $975.98 million. An amendment (Communication 754.8) was approved to add 10 student helper positions in the Department of Human Resources for a pilot program targeting high school students islandwide. The bill passed first reading 7-0 (with two excusals).
Bill 136: Capital Improvement Budget (First Reading)
The mayor’s amended draft two (Communication 755.3) was adopted, reducing the number of projects from 45 to 44 and increasing total appropriations by $16.96 million (to $375.7 million). Several amendments from Councilmember Houstis were approved:
- Communication 755.4: Reappropriated $2 million for the Waikoloa Village gymnasium project (previously $200,000).
- Communication 755.5: Added $1 million for the Lindsay Road extension in Waimea, connecting to Alohia Road, with contributions expected from Parker Ranch.
- Communication 755.6: Expanded the Kamakoa Nui mini loop road infrastructure project to plan for full connectivity across the property.
- Communication 755.7: Added $500,000 for a public comfort station at a Pāhoa (Punk) parcel in North Kohala.
The bill passed first reading unanimously (8-0).
Key Outcomes
- Resolution 574-26 was adopted (8-0), setting property tax rates for FY 2026-2027, including reductions for homeowners and affordable rentals, and establishing rates for new residential tier three and long-term rental classifications. The measure is expected to generate $17 million in additional revenue for the county.
- Bill 135 (operating budget) passed first reading and will be considered for second reading on June 4, 2026, along with Bill 136.
- Bill 136 (capital improvement budget) passed first reading with four amendments, adding funding for a gymnasium, road extension, infrastructure planning, and a public restroom. Second reading will occur on June 4, 2026.
- The council directed the Department of Environmental Management to report on the status of the Kahaluu sewer project contract encumbrance and noted that animal control should follow up with Councilmember Kagiwada on funding for dangerous dog signage under new state law.
Next Steps: The council will hold a special meeting on June 4, 2026, at 9:00 a.m. in Hilo for the second and final reading of both budget bills.
Meeting Transcript
Good morning and welcome to the 40th session. This is a special meeting of the Hawaii County Council. The date today is May 21st, 2026, and we are meeting at our Hilo Chambers, 25 Alpuni Street. To begin today's meeting, I'd like to call on Pastor John Andris of Engaged Church Hilo to provide our advocation. Thank you, Mr. Chair. Again, my name is John Andris. I'm a resident here of 40 years. I noticed on your agenda today that you guys are going to be dealing with budgets. Yay. And we deal with that also. But I saw that specifically some of it is going to be dealing with infrastructure. And it made me think about just something that I'm preaching on actually starting this Sunday. Shameless plug in front of all the politicians here. But Nehemiah in chapter one, verses three and four, was dealing with infrastructure issues in Jerusalem. And he got a report, and they said to me, the remnant there in the province who had survived the exiles in great trouble and shame. The wall of Jerusalem is broken down and its gates are destroyed by fire. And as soon as I heard these words, I sat down and wept and mourned for days. And I continued fasting and praying before the Lord, the God of heaven. And um, I'm really thankful for a lot of the improvements on our roads recently, but I know that there is so much, and growing up in here, it's not something we want to be in shame of our infrastructure as we look at Coconut Island and other places like that. And so I know you have a big task, and I know balancing budgets. Um mine is not quite the same size as yours, um, but it is not easy. And I want to pray uh for wisdom for you guys and for our county as we head into the session if you'll join me in prayer. Father God, thank you so much for uh the people you've gathered here, uh, the wisdom you've brought together, and I pray that you would work through all these decisions that need to be made, testimonies that are shared, bills that are gonna be debated, and God I pray that uh your spirit would be present and direct, that it would bring uh just prosperity on our county life, and I pray that uh you would work through this session, give wisdom and understanding and bring unity even when there are difficult decisions to be made. Uh so would you guide these proceedings and bring about something that is uh going to perpetuate the righteousness and the life and the goodness and the welfare of the people here in our beautiful island? I pray this in your name, Jesus. Amen. Amen. Mahalo, Pastor. Uh, with that, it is 9 05. I'm calling this meeting to order, Mr. Clerk, roll call, please. Councilmember Golemba. Here. Consumer Houston. Present. Council Mr. Kagiwada. Here. Councilmember Conley Kleinfelder. Yeah. Councilmember Kirkowitz. Present. Councilbury Campbell. Present. Councilmember Viegas. Sherry Nava. Ew. Chair, you have eight members present. You have quorum.
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