Don’t create fund using state Constitution

In its latest effort to address the state’s perennial teacher shortage, the Hawaii State Teachers Association (HSTA) wants to amend the state Constitution to allow the state to collect a property tax surcharge on residential investment properties and a daily surcharge on all visitor accommodations at hotels, timeshares and vacation rentals — with the tax dollars funneling into a special fund for education.

If lawmakers agree to place the amendment on the 2018 ballot, voters would be asked: “Shall the Legislature fund a quality public education for all of Hawaii’s children, including the recruitment and retention of teachers; lower class sizes; special education programming; and career and technical education, art, music, Hawaiian studies, and Hawaiian language instruction by establishing a surcharge on residential investment property and visitor accommodations?”

If approved, the surcharge would tap visitors and residential investment properties — homes or condominiums that do not serve as a primary residence — for an estimated $500 million per year, according to the HSTA.

It’s a flawed proposal. By cementing the fund in the Constitution, the amendment would hinder the Legislature’s basic duty to made timely decisions about public spending, including for public schools. It also could set a precedent, prompting other unions or organizations to seek a similar protected funding source.

The union asserts that the funding is sorely needed to make up for inadequate schools-related funding. For example, on Aug. 1, the first day of the current school year, there were 531 teaching vacancies, including 126 unfilled special education teaching positions. More money to recruit and retain teachers could ease the problem, the HSTA says.

While there’s little doubt that the Department of Education could benefit from more funding, the union’s proposal raises more questions than answers.

Last week, Rep. Roy Takumi, chairman of the House Education Committee, said he favors increasing the DOE’s operating budget, which is among the state’s largest — about $1.6 billion is allocated from the general fund this year. But he suggested that creating a permanent funding source by amending the Constitution could “flip collective bargaining on its head,” allowing one public worker union to have a vaguely defined special pot of funds from which it could negotiate for pay raises.

Another question: Would the creation of this pot of funds for education touch off a clamor among other public worker unions to seek constitutional amendments to establish their own special funds? That would further remove the Legislature from its checks-and-balances role in establishing annual budget and spending priorities.

There’s also the question of whether the tax is economically sound. Critics say the additional tax on residential investment properties would make rental units in Hawaii, already scarce and expensive, even more so.

HSTA’s proposal includes Senate Bill 683 and Senate Bill 686. The first proposes amendments to the Constitution to give the Legislature the power to establish the surcharge, and the other would establish the surcharge and a special fund for the collected funds. An amendment is needed because the Constitution exclusively authorizes the counties to levy property taxes.

This is not the first time HSTA has sought a dedicated source of funding. Last year, the union failed to convince the Legislature to raise the general excise tax for the same purpose.

HSTA President Corey Rosenlee has said that by putting the issue to voters, lawmakers would not be put in the position of voting for a tax increase. But that is their job — to make the hard calls in response to the state’s needs and the wishes of the citizens, as the times and circumstances require.

Constitutional amendments are difficult to undo, especially if there is no expiration date. It’s a step that should be taken only in certain rare circumstances.

This is not one of them.