Mayor Mufi Hannemann yesterday said his administration will strive to not raise property tax rates next year on the roughly 140,000 households that fall into a new owner-occupant classification.

"We're very committed to trying to keep the homeowner rate at $3.42 (per $1,000 of valuation)," Hannemann said at a signing ceremony for the bill that creates the new tax category. "I've always said we want to try to help our local homeowners — those with fixed incomes, our seniors. We believe this separate classification enables us to do that."

City officials say it's too early to say if, or how much, taxes will go up even though they have been warning about a possible $140 million-plus shortfall in the city's $1.8 billion operating budget.

The mayor submits a budget in March and the City Council has until June to adopt tax rates for each of the real estate categories.

Hannemann and others who supported creating the new tax category say it gives the mayor and the City Council another tool as they try to wrestle with the shortfall.

Critics say the bill is politically expedient, allowing the mayor and the council a convenient way to shift tax increases on the other categories, in particular owners of residential parcels who don't live on their property. Those critics believe landlords will pass on the tax hikes to their tenants.

Residential properties account for 82 percent of the total assessed value of all real estate on Oahu. Owner-occupants make up more than half of all residential property owners.

Honolulu is the only county in the state not to have an owner-occupant category. Hannemann said an owner-occupant category has worked on the Neighbor Islands. "We believe we can do this on O'ahu," he said.

The bill had a rocky time at the council. It passed Tuesday night by a 5-3 vote, but only after the council reversed a decision to shelve the bill earlier in the day. Several council critics accused the mayor of trying to manipulate their colleagues.

Hannemann reiterated to reporters that he did not make any political promises to Council Chairman Todd Apo for agreeing to support the owner-occupant bill. Apo had expressed grave concerns about from the time it was first introduced but said he was talked into supporting it, although he stressed he's still not convinced he will support a separate tax rate for owner-occupants, even if there is a separate rate category.

The mayor acknowledged concerns that higher property taxes could be passed on to renters, and said his administration will lobby the Legislature to provide relief for them during next year's session.

The mayor also said that contrary to criticism , the new tax category actually helps the commercial and hotel/resort classifications which have born the brunt of property increases in recent years.

Council members Rod Tam and Donovan Dela Cruz, who supported the bill, said they've heard from too many retirees who say they're having a hard time making ends meet.

"We don't want to tax people out of their homes,"Dela Cruz said.

Downtown condominium unit owner Barbara Ideta, 74, was among those who testified for the bill.

Ideta, a credit union executive, said she doesn't know how she would be able to pay all her bills if she were not still working. "You don't realize what the obligations are until you're a senior,"she said, noting that many of her friends are without jobs or medical coverage.