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Letters: Maui, Ignorance Will Be Your Demise

To the Mayor, County Council, and citizens of Maui:

As a time-share owner on Maui, I thought you might be interested in the ramifications of Maui’s war on time-shares, how this impacts me and what effect it will have on YOUR future.

I purchased my ownership on Ka’anapali Beach, north of Black Rock in Jan. 2003. At this time, time-share properties were (property) taxed as a Resort/Hotel. For fiscal year 2004, this meant a tax of $8.30 per $1000 assessed value. For the homeowner/resident, your tax was $3.55 per $1000 assessed value. Summarized, visitors were being billed 133% more than the resident while visitors majorly supported your economy.

In November 2004, the Maui County Council chose to create a specific property tax classification just for time-share properties. Online news reports have attributed this action to Maui’s dislike for uncontrolled time-share development. This was their effort to discourage sales and therefore future projects. However, their nearsightedness failed to allow them to see that they weren’t punishing the fat cat companies and corporations but rather the tourists, people like yourselves, most of whom are retired or middle-aged that work 40-60 hours a week like you. I purchased under the good faith of Maui government in existence at the time, only to watch it disappear in less than 2 years.

To my recollection, the owner’s association had described the increased taxation as Maui’s decision that time-share owners should be held more accountable to infrastructure repairs and replacements/upgrades. According to online news reports, it was Maui’s government belief that this segment of the visiting population placed an unusual burden on the infrastructure, specifically the roads and the water/ sewer system.

Shortly after Maui’s decision to raise time-share owner’s taxes through reclassification, a timeline of events shows that Maui commissioned a $75,000 timeshare study to Hospitality Advisors LLC, which, along with the University of Hawaii School of Travel Industry, determined that time-share use had no differing effect upon Maui than the Resorts and Hotels. This finding became clear in June 2006, though without significant mitigation in time-share property tax assessments, or the removal of this classification and the relumping of time-share taxation back with Resorts and Hotels as their study had verified.

In fiscal year 2006, time-shares paid $14.00/$1000, hotels and resorts paid $8.20/$1000 while homeowners paid $2.50/$1000.

Maui is the only county within the state of Hawai’i to have a separate Time-Share tax classification. This DOES NOT exist on the islands of Hawai’i or Kauai or in the city of Honolulu.

As of 7/1/2016, time-shares are taxed at $14.31/$1000 assessed value. The next party penalized are the other resort/ hotels/hospitality units (including private condo or room rentals), taxed at $8.71/$1000. Lastly, as you might expect, are the island homeowner residents, taxed at a paltry $2.70/$1000. Time-share owners are taxed at greater than 400% the rate of the resident and almost 65% more than the other visitor housing options.

Maui Mayor and County Council, what message does this convey?

The average time-share owner (myself) sees a government who makes decisions for change without clear evidence to suggest it, i.e., it was not evidence-based. That decision was geared to highly favor their citizens, relieving them of all to most of the burden to financially maintain the society they live in full-time.

  • I see a government who randomly chooses to disparage time-share owners with a higher taxation class than Resorts and Hotels despite Maui’s paid evidence (study) suggesting both should be treated the same.
  • I see a government who chooses to obtain(?)/retain the good will of their citizens through lower property tax rates, increasing Mayor and Count Council chances for re-election.
  • I see a government who places their financial burden on those who lack input and the ability to vote otherwise.
  • I see a government who has lost the good will of the visitor, they just haven’t seen it yet (but it’s coming and you should be worried).
  • I see a government who doesn’t understand the disintegrating future they have willed their people.

Citizens, you are likely aware of the time-share dispute with the Maui government and the lawsuit that has followed. Just prior to a recent court proceeding, the Maui government decided that it hadn’t properly assessed the time-share owners, represented in the lawsuit, for years 2006, 2007 and 2008. Online reports state that the affected two complexes were assessed as time-shares but not as private condominiums (more on this later). The original $2.1-$2.5 MILLION they had received just from my complex alone during each of these years was effectively DOUBLED, each year.

As for my suggestion of double taxation (time-share and being a private condominium), it’s very similar to glass bottles, isn’t it. You pay a deposit to penalize you if you fail to recycle it, only to have an “environmental fee” assessed against you as well. Either way, Maui always gets its money. And since everything about Maui is based on money, one can not help but to believe that some form of corruption exists.

Citizens, I would really feel sorry for you, having to deal with your mayor and county council were it not for your exceptionally low property taxes. While you might feel inclined to pat them on the back for their generosity, consider this.

What is Maui’s chief industry for revenues?

Where does Maui’s chief means of revenues come from?
Tourists, most of whom are time-share owners.

If tourism falls due to time-share owners boycotting your county, who will be maintaining your economy? Who will be paying your bills?

*Less visitors means incomplete flights and less airfare taxes to pay for renovation, maintenance, and operations. Who is going to pay for that?
*Less visitors means less car rentals and less gasoline purchased, both of which provide taxes for road maintenance. Who is going to pay for that?
*If you or someone you know works at the airport, as a ticket agent, a gate agent or baggage handler for example, expect permanent lay-offs because the volume of arrivals won’t support the current labor costs.
*Same goes with a car rental agency.
And expect the lower volume of flyers to jack the price on airfares for you. It’s called supply and demand, and pricing always follows demand unless supply creates an overhead cost that can’t be managed.
*Less visitors means time-share complexes with fewer visitors. That spells cutbacks on staff. More jobs will be lost.
*Less visitors means less dollars going to private businesses as well. Shopping, restaurants, tourism activities…if you have a job here, some will have to say good-bye. If you are a small business owner, some if not most of you won’t be able to keep your doors open.

Do the math.
Are you better off with less traffic? Sure you are, but at what cost elsewhere?
You can deny accepting this future all you like but your local government is hard at work to create and maintain it. They are determined to put Maui in line behind Puerto Rico for bankruptcy. YOU, citizen, are either part of the solution or part of the problem. There’s no place in the middle to hide.

Oh, and don’t worry about this average owner. I don’t have to come to Maui to use my ownership. In fact I’m not even trapped (like you are) to have to put up with your inept government by paying another outrageous property tax. Likewise, forget about any further contributions to your economy.

Nothing personal – I just don’t go where I don’t feel welcomed.

I’m guessing a lot more time-share owners will feel the same way and exercise their options by the time I’m done, via local radio and television outlets; Local, Oahu and west coast U.S.newspapers; airline inflight magazines; Maui time-share owners associations; Online travel sites and time-share sites; Online complaint websites; My blog; Political Action Committees;…you get the idea. With all the property tax I’ll be saving, I can even afford to splurge on paid advertising to get my very simple point across to others. The facts speak for themselves.

You see, we all get to choose. What will you choose?
Hope like hell I’m wrong (because once the tourism downturn/downward spiral begins, it will be too late to change; you’ve already lost) or save some semblance of life by paying your way and demanding that your representatives find other alternatives?

Time-shares, like it or not, are your lifeline. Cut it and you will most definitely bleed to death. The numbers don’t lie.

Ronald Baxa
Cove, Oregon

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