I flagged this comment when it was posted on the “Next Door” website.
Just got our property tax bill from City /county of Honolulu and it went up again . That was upsetting , but I decided this year to put it on our credit card so I could get flight points. Our grandkids love to visit and flights are so expensive.! So I call the number on the back and a nice man informs me that it would cost me 76.00$ to put it on the credit card. Even more annoying was , he was working in Texas because the city outsources the payments. So we don’t have a bill paying service in our own state? They can’t give local people the job here? The county can’t set up a service here so more of our young people can stay here to work? So next time I hear how the state is concerned about losing our young workers, they should look at their own policies.
It seems like a fair point.
But one comment made a pretty good point in response.
it is not simply a matter of hiring people to do jobs. it takes special software and interfaces to deal with the credit card companies, all kinds of computer security updates and controls, and these are neither inexpensive to install for a big government process, nor cheap to maintain. There are service companies that specialize in providing that service and they are more cost effective than trying to do it “in house”. The processing fee is a pass through from the credit card processors, part of which gets rebated to people, like the original poster, who earn “flight miles” on their cards. Using an “echeck” is only a $2 or $3 fee or else, the check can be mailed by “snail mail” at no extra charge.
So it may be that setting up an operation of that kind in Hawaii, with its relatively small population coupled with high costs, just isn’t feasible, even if there were “buy local” preferences in place.
The Institute for Local Self-Reliance has a good discussion of local purchasing preferences that have been adopted by many state and local governments.
Here’s an excerpt:
Local governments spend a lot of money, and their procurement and contracting policies can be important mechanisms for advancing other public aims. Many cities, counties, and states give a preference to local businesses in their procurement decisions as a means of supporting and growing their local economies.
At least 45 states, plus the District of Columbia, have procurement policies designed to give a preference to businesses that meet certain characteristics, such as those that are owned by veterans, pay certain wages, use environmentally sustainable practices, or manufacture within the state. Of these, about half have adopted an explicit preference for businesses that are small and/or local. In addition, more than thirty states have policies aimed at steering purchasing to minority- and women-owned businesses.
Looking beyond state governments, large numbers of counties, cities, and towns have procurement policies of their own.
These policies vary considerably. Some apply broadly, while others focus on construction contracts, others on goods and services, and others only in certain narrow situations. Some are absolute preferences, or more commonly, percentage preferences. These say that if a company meets certain qualifications, it doesn’t have to have the lowest bid in order to win a contract, just be within a certain percentage—usually 5 percent, but as high as 15 percent—of the lowest bid.
I couldn’t find a concise description of preferences used by state and counties in Hawaii.
State law does have preferences for certain kinds of “made in Hawaii” products.
A Hawaii product requires over fifty per cent Hawaii input towards the total cost of the product for:
(1) Class I products mined, excavated, produced, manufactured, in the State; or
(2) Class II products are agricultural, aquacultural, horticultural, silvicultural, floricultural, or livestock product raised, grown, or harvested in the State.
Are there others? And are there legal limits? When does the idea of competitive bidding to create a level playing field give way to specific preferences?
Interesting issues.
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I would respectfully disagree with the commenter. It is very easy these days to process payments, and note that at various government offices, you can now pay by credit card. Even DLNR takes credit cards. A receptionist can do it.
But remember, the city still works with COBAL and even paper documents.
Please explain to me why suddenly the C&C vehicle registration system went from having the option of using one’s credit card at NO extra “fee” charge to now having an extra “fee” charge?
For many, MANY years it was so simple to just put it on the card online and be done with it (and yes, maybe even accruing some air miles as well).
Now, because of the charge, I’ve gone in person into satellite city hall to pay by check purely because I refuse to be treated like crap (yet again) by the county because they are too incompetent or cheap or whatever to continue using the system that made things EASIER for the taxpaying citizens!
“Easier for you” costs other taxpayers money.
Government exists for taxpayers. To make things convenient and more attractive to taxpayers is one of government’s duties. I am a taxpayer. I would wager plenty of other taxpayers quite liked that option of using a card for auto registration (still an option BUT with “fees”). And government ruined a perfectly good formula that went on for years. I won’t believe the “fees” became so onerous that it forced government to rescind the service. I believe it’s nothing more than government laziness and greed.
I supported the extra fee. Depending on the card used and merchant agreement, merchant fees can range from about 1.5% to over 3%. Usually the higher merchant fees go with higher rewards cards. It’s not fair to other taxpayers to have to pay for the higher rewards.
The city messed up, however, when they started charging for ACH payments. They’re cheaper to process than checks and create a disincentive from using that form of payment.
When you use a credit card, anywhere, the transaction has a ~3% charge from the credit card company to cover processing.
So if you’re paying a $100 bill with a card then merchant only gets $97
If you extrapolate this over hundreds of thousands of transactions you’re looking at significant losses. Which is why businesses typically give a “cash discount”. With government imposed taxes and fees you owe $100. If you use a card and they don’t recover the fee then you haven’t met your full obligation.
You could argue that “government should eat the ~3%” but the net effect, if you wanted to be revenue neutral, would be a ~3% increase in the respective tax / fees and that would actually hurt those that continue to pay by cash / check since they’d now be subsidizing those who pay by credit card.
Although it’s been more than a decade since I bid on a Hawaii state government proposal, there was a 10% preference for most services-based gigs, such as custom software development. That is, if a mainland company bid 100,000 and the local company bid 109,999, the local company would be judged to be the low bidder. Of course, the state liked to say that it wasn’t always the low bidder that won, other factors were also judged, such as past experience. But in my experience, the low bidder always won. C&C of Honolulu also followed this preference. In all the bids I was involved in, probably a couple dozen at least, I don’t ever recall either the mainland or local vendors complaining about this preference.
Your $76 fee seems excessive and way beyond any I have experienced in paying online – for the convenience as well as miles. I pay GE tax on rental income twice a year, estimated tax mayments quarterly to both HI and the Feds, etc. These service/convenience feews only add 4-5 dollars per transaction and I am happy to fork over the fees – again for convenience and the miles.
Oooops – additional comment. Me thinks since you pay directly you don’t have a mortgage. Our mortgage company pays our prop tax and household insurance amounts when they are due – no extra charge.
Rentvine charges $44.00 extra if you use a credit card to pay for your rent as oppose to a $2.80 surcharge from your bank account. So that $76.00 surcharge sounds about right.
The system is not designed for you in any way,shape or form.