About 70,000 low-income renters would get a one-time, $150 tax credit under a proposal set to go before the City Council.

Mayor Mufi Hannemann said in a news conference yesterday at Honolulu Hale that the tax credit will be part of his budget package for the 2007-08 fiscal year, which will submitted to the council on March 2.

The credit would help renters who earn less than $30,000 a year.

Hannemann said the credit would allay some fears among City Council members about the creation of a discounted tax classification for homeowner-occupants. The mayor renewed his call for the new tax structure in December after the council shot it down in 2005.

Several council members have said lowering property taxes for owner-occupants could mean higher taxes for landlords, which would likely be passed on to renters. They also said the exemption would disproportionately help those living in expensive homes.

But Hannemann said the tax credit would mean those most unable to cover any increase in rent would get help. The credit is for 2008.

The state also provides a $50 tax credit to low-income renters based on the same qualifications. Hannemann said the city based its calculations of eligible renters on state figures.

"While the city has taken several steps to ease the tax burden on residential property owners, currently there's no mechanism for providing direct relief to renter," Hannemann said. "This credit would help fill the gap."

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.