How could the proposed Rise bond mechanism affect Hawaii County's future revenue?
Hawaii County may lose future tax revenue under proposed infrastructure bonds The proposal to issue RISE bonds for infrastructure means that future tax revenue generated by developed projects could be used to pay off the bonds rather than going to the county. For example, while a county might receive $1,000 per year in property tax on a vacant parcel, a home built using RISE bonds could generate $4,000 per year. The reports state that the additional $3,000 would be allocated to pay off the bond, reducing the county's overall tax intake.
- Effect
- Mild negative
- How direct
- Stated in the reporting
- When
- Over the long term
- The story
- Gone quiet
How it reaches Hawaii County
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Officials in Hawaii discussed housing solutions, noting that high housing prices are partly due to the cost of infrastructure like roads and water connections. A proposal was introduced to issue RISE bonds, which would be repaid using future tax revenue generated by a developed project, rather than through general government bonds. Kauai Mayor Derek Kawakami supported the proposal as a more equitable funding method.
The full event1independent outlet -
The RISE bonds are proposed to finance infrastructure, and they are paid back using future tax revenue generated by the developed project. This means that while the county still receives some property tax revenue (e.g., $1,000/year on a vacant parcel), the additional revenue generated by a home built with RISE bonds (e.g., $4,000/year) would be used to pay off the bond, not the county.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- kitv.com Oct 14
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county in Hawaii, United States
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The facts so far
As reported. Each one links to where it comes from.
- RISE bonds are proposed to fund infrastructure, which is paid back from future tax revenue from a project once it is developed.kitv.com
- A county may get $1000/year in property tax on a vacant parcel of land.kitv.com
- A home built with RISE bonds could generate $4,000/year in property tax.kitv.com
- The additional $3,000 generated by the home would go to pay off the RISE bond.kitv.com
Why it matters
The adoption of the RISE bond mechanism represents a fundamental shift in how infrastructure costs are financed in Hawaii. For counties like Hawaii County, this means accepting a trade-off: potentially solving the pressing need for more housing by allowing developers to build, but in exchange for a reduction in the county's long-term property tax revenue.
This mechanism is being debated as a more equitable way to fund infrastructure, as opposed to government-funded bonds where every resident contributes. However, the financial risk is real, as noted by Tax Foundation Hawaii, where construction delays or cost overruns could leave counties and taxpayers on the hook for the principal and interest owed to bondholders.
What we don't know yet
- What specific financial safeguards are in place to protect counties from cost overruns or construction delays?
- How many counties are expected to participate in the RISE bond program?
What would change this answer
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About Monthly Mortgage Payment
Given that construction delays or cost overruns could leave taxpayers on the hook for principal and interest, how might the RISE bond structure affect the monthly mortgage payments for new homeowners?
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Reporting
- kitv.comOct 14
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