By Natalie Iwasa – Did you know real property tax exemptions for taxable properties will likely cost us over $100 million next fiscal year? Unlike most costs, however, you won’t see this as a line item in the budget. And the cost is likely higher, because the city doesn’t even regularly assess some of the properties that receive exemptions.
We’ve already discussed nonprofit organizations under ROH Sec. 8-10.10 and the related taxpayer subsidy of lobbyists under these organizations, so let’s take a look at entities under Sec. 8-10.24, credit unions.
When credit unions were first established, they filled a void and provided services banks would not. Today, however, credit unions compete directly with banks while banks have expanded their services. According to the United States Government Accountability Office in its report on credit unions:
“. . . the 2004 and 2001 Survey of Consumer Finances indicated that credit unions lagged behind banks in serving low- and moderate-income households.” (Emphasis added.) 1
In addition, most credit unions on Oahu have healthy bottom lines as well as healthy financial positions. Hawaii Business Magazine’s August 2013 issue included its annual “Hawaii’s Most Profitable Companies” report, and 4 of the 25 most profitable companies in the state were credit unions. Three of them had double digit profits as a percent of revenue. One boasted that its assets had grown from $491 million in 2008 to more than $750 million in 2013 – a 53% increase in five years.
Because of their exempt status, these organizations pay only $300 per year in real property taxes, even though their combined assessed values total almost $160 million. Should taxpayers be subsidizing these organizations? I don’t think so.
1CREDIT UNIONS – Greater Transparency Needed on Who Credit Unions Serve and on Senior Executive Compensation
Natalie Iwasa is an accountant who lives in Hawaii Kai who also is running for Honolulu City Council in 2014