I don’t agree with the appeal to the U.S. Supreme Court by a group of non-Hawaiians demanding to receive the same exemption from county real property taxes granted to those living on lands leased from the Department of Hawaiian Home Lands.
The case is just another in a string of cases seeking to end all legal preferences of any kind to Hawaiians or other minorities, and should not be taken up by the high court. A basic description of the case, and links to key documents, can be found at the InverseCondemnation blog.
On the other hand, although I am part-Hawaiian, I share the view that those on homestead leases should be paying their fair share of county expenses.
Presently, they receive exemptions covering the total value of their properties, and are required to pay only a token amount in tax. I think it’s usually $150 (or less) in Honolulu. I haven’t had time to track down the current amount. The situation on neighbor islands is roughly the same.
In 2009, DHHL reported 4,183 residential leases on Oahu (pg. 29 of its 2009 annual report). I don’t know the average annual savings homesteader’s enjoy–I would guess $1,500 would be a conservative guess. And that would mean the city loses some $6,274,500 in annual revenue as a result of this tax exemption. The actual amount will be different, of course.
It’s an important issue because real property tax is the main source of income for the counties, and it is the counties that provide basic services–police, fire, emergency medical, road maintenance, transit, etc.
If those on DHHL land don’t pay their share, the rest of us (Hawaiians and non-Hawaiians alike) pay extra to provide for them with services. If DHHL provided its own fire, police, etc., then the county exemption might make sense. But that’s not the case.
Okay, I’ve gone out on a limb on what I’m guessing is a controversial issue. Let’s see what you think.
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As regards property taxes I think just about all exemptions should be tossed out.
Where was the supreme court when Queen Lili’oukalani was wrongfully imprisoned. Statehood voting rigged:
1) only “statehood” & “free association” were on the ballots. “Sovereign” and “monarchy” were left out.
2) Immigrants were allowed to vote for statehood
The US military bases and Airports are on stolen crown lands. If Hawaiians gotta pay for cops and ambulances,the US government should pay every Hawaiian for rent. Eskimos and Alaska citizens get money every year for their resources (oil). Why does Alaska residents get oil money and the rest of America doesn’t? Where is the supreme court allowing it? Isn’t that against you constitution. Hawaiian lands were stolen. Plain FACT. Bill Clinton came out in public admitting it was illegal and signed the “Apology Bill”.
I think that you should evaluate what the REAL HAWAIIANS ARE going through, we cannot farm because you divert the water we cannot survive because foreigners are taking all our jobs we cannot eat because we have no money, my question to you is: DO YOU WANT TO SEE THE PEOPLE IN POVERTY YOU OBVIOUSLY ARE MORE HAOLE, THEN HAWAIIAN BECAUSE ALL THE HAWAIIANS I KNOW ARE BARELY MAKING WHICH TO SURVIVE, YOU CALL YOURSELF HAWAIIAN YOU HAVE NO IDEA WHAT THE HAWAIIANS ARE GOING THROUGH!!!!!!
At some point, preferential treatment based on race has to end. I have Hawaiian relatives and friends on Hawaiian homelands and I think they should pay for police, fire, etc. just as we all do. That’s fair.
Ian has correctly stated that it’s not fair for DHHL homesteaders to receive expensive county services (fire, water, streets, trash, etc) while escaping nearly all the taxes that pay for those services. But Ian then says the Supreme Court should not take up the Corboy lawsuit that would put an end to the DHHL exemptions. For more than 30 years payers of property taxes have been burdened with the DHHL exemptions and nothing has been done about it. If not now, when? If not Corboy, then who? Kudos to Corboy. Imua!
Ian says “The case is just another in a string of cases seeking to end all legal preferences of any kind to Hawaiians or other minorities, and should not be taken up by the high court.” Yes, there has been a long string of cases seeking to end racial entitlements in Hawaii. Every one of them has been thrown out of court on technicalities (generally regarding “standing” or “political question doctrine”), and the dismissal has often happened after several years of delays and wrangling over extraneous issues, and huge expenditures by plaintiffs (who pay their own costs) and government (which uses tax dollars collected from us all, including the plaintiffs, to pay its costs). None of these cases has reached the point where they could be litigated on the merits because the defendants’ lawyers do what lawyers are hired to do, which is to win by any means necessary including delays, digressions, and dismissals on technicalities.
So I disagree with Ian, and say it’s high time — way past time — when the question should be decided by the U.S. Supreme Court. Is it legally permissible for government to provide handouts to people based solely on race? Or should we take the 14th Amendment Equal Protection Clause seriously and eliminate racial entitlements? Either we’re all equal under the law or we’re not. Either our multiracial society must treat all races equally, or else we’re allowing the government of us all to adopt one race among us as its favorite while all others must sit in the back of the bus as second-class citizens. This is exactly the sort of fundamental “big picture” issue which the founders of our nation created the Supreme Court to deal with. Either we have the rule of law, or else we fight a race war such as Zimbabwe, Rwanda, Bosnia, Sri Lanka, etc.
DHHL should pay the difference between the exemption and the true property tax.
I think ALL exemptions should be eliminated – homeowners, old futs, non-profits, and DHHL lands. Why should the rest of us pay for the services provided to these landowners.
Maybe if we could afford to buy a residence – even just a studio condo – then I might think differently; however, our landlord provides us with an annual tax bill which is almost $500 more than the family living next door even though they’ve built a swimming pool and an `ohana unit for the grandparents. According to the tax department, their property is assessed at more than $100,000 than ours, but they’ve got nearly $250,000 in exemptions.
Let’s extend that: as recommended by the bi-partisan budget deficit reduction commission several years ago, let’s do away with the mortgage interest deduction. There’s no reason that renters should be subsidizing home ownership for others. It distorts the entire economy.
Congress believed house owning was good (a mortgage does tend to sober one) so put the deduction in. House prices are probably higher than they would be without the deduction. Removing it would knock a lot of equity out of the system. We just lost a lot of equity in American housing and a lot of people are underwater’. This might e the equivalent of concrete overshoes for those still able to meet their payments.
20-year phase-out, beginning with mortgages taken in 2015. In 2016, you get to deduct 95% of your interest. So instead of $10,000 you deduct 9,500. If you are in 32% combined fed and state tax bracket, you pay $160 more that year. $160 per year is considerably less than what all of our water/sewer bills are increasing, and I don’t see a massive implosion in property values since BWS has announced rate hikes.
A steady phase-out of the mortgage interest deduction would be a huge step towards solving some of our state and fed fiscal problems.
Sewer bills are a little bit different from 30 year mortgages but since my lengthier attempt to respond was eaten by the system, I’ll let it go at that.
I feel your pain concerning eaten posts.
I know sewer and mortgage interest is not the same, I was just trying to point out that a gradual phase-out of the deduction does not make for a massive collapse of the housing market.
In fact, if Congress passed such a repeal this year with 2014 enactment, we might get a 2-year mini-stimulus (if you’re into that kind of thing). I can see the ads, “Buy now before your deduction goes away!”
It sounds like you are responsible for paying the RPT. Is that correct? Most businesses have net leases that require payment of the RPT, but I haven’t come across many residential properties that are structured that way.
I think the biggest danger with the current litigation going to the US Supreme Court is that they (the Justices) may strike down many other programs and services that do assist the Hawaiian community in addressing problems many Hawaiians face.
Since this litigation only deals with the tax exemption for DHHL housing, I think the counties should immediately remove the exemption to prevent the court from ruling. The removal of the exemption will render the basis for the lawsuit moot.
That would shutdown the litigation until the next round, but I think the DHHL exemption is too easy a target for the the conservatives on the court who would be inclined to get rid of all kinds of preferences.
I agree with some of the posters above that ALL programs, preferences and the like which are based on race should be abolished. Sooner or later minority groups are going to have to man-up, stop whining about “past injustices” and pull their own freight. How long do these preferences need to last before enough is enough? 100 years, 150 years, 200 years, 500 years? I agree with KC, it is high time that the Supreme Court resolves the equal protection question.
The question of whether tax exemptions are good policy is different from a lawsuit arguing that the State or Counties do not have the right to offer such exemptions. They clearly do even though DHHL is an obvious example of racial discrimination.
DHHL is protected from this kind of litigation because it is included in the Admission Act. While all the UH Manoa Hawaiian Studies profs were crying a river over the ceded lands decision (9-0 SCOTUS reversal of the 5-0 Hawaii Supreme Ct), nobody stopped to take notice of what SCOTUS’ decision was based on.
Well almost nobody ….
Supreme Court ruling shields Hawaiian Homelands and ceded lands revenue
http://hawaiifreepress.com/ArticlesMain/tabid/56/articleType/ArticleView/articleId/589/Supreme-Court-ruling-shields-Hawaiian-Homelands-and-ceded-lands-revenue.aspx
The current exemption for properties under Hawaiian Home Land Leases cost us approximately $4.7 million this fiscal year. According to the city, 2,978 properties fell into that category of exemption. Owners of properties under this exemption are required to pay the minimum tax, which is $300 for this fiscal year.
It is my understanding that there are also 1,194 properties under Hawaiian Home Lands that are non-taxable. The cost to taxpayers for those properties is approximately $4.2 million.
real property taxes are paid by the feeholder of the land unless an agreement shifts that responsibility to a leaseholder. considering, however, that the state and the federal governments as landowners do not otherwise pay county real property taxes, it is unclear why holding a long term lease from them would suddenly create an exception to this general rule forcing native Hawaiian leaseholders to pay property tax for land that is not otherwise taxable. although characterized as an “exemption” it is actually not and i doubt that the $150 tax is even legally compulsory against native Hawaiians who hold leases.
The real property tax is to cover basic county services such as police, fire, road maintenance and the like. If DHHL leasees did not benefit from those services, then they could not even get the houses built or mortgages for them.
If the leasees don’t want to pay the real property tax, then they should not accept those services. OHA or DHHL should then supply those services for them, or pay the counties for them. The problem is that if of any legal benefits are based on racial or blood quantum, I think the US Supreme Court will strike down the exemption. The exemption is a county law and not the federal law that established the DHHL. That hurdle is going to be legal issue that will be the key to the decision.
I’d just like to commend all the posters (so far) for keeping it civil while discussing this hot topic. Thanks, everyone!
Exempt the land, tax the structure value.
I have zero Hawaiian blood quantum as one of mostly Welsh, some Scottish, French and English origins and possibly Finnish.
I have resided n Hawaii for more than 45 years. I have no quarrel with this minor give back to native folks our forebears took so much from over the period from Cook’s visits to the revolution that took away the monarchy under force with a key assist from U.S military. While we cannot fix past wrongs entirely, we can be a lot more gracious going forward. Energy expended on this debate would be better spent on finding the the many lost acres set aside by Congress in 1920 under the Hawaiian Homes Act. This property still is not accounted for by the state or the feds.
Why do I pay the Real Property Office for Land Tax when Hawaiian Homes say we don’t pay land tax What am I paying if it’s for the county then why do we get the bill from Hawaiian Homes?