The Hawaii State Teachers Association says it wants to tap into property taxes to help better fund public schools.
The teachers union has drafted a proposed constitutional amendment that would 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.
An amendment is needed because the state Constitution exclusively authorizes the counties to levy property taxes.
The union says the proposed surcharges together would raise an estimated $500 million a year that it wants set aside for four priorities related to hiring and retaining teachers.
“With that $500 million we think we can start solving the systemic problems that we have in Hawaii schools,” HSTA President Corey Rosenlee said in an interview today. “At the core of it, as long as we have a teacher shortage crisis and we don’t have a surplus of teachers, it’s going to make it very difficult to attack a lot of those other problems that are affecting education.”
The tax on residential investment properties — homes or condominiums that do not serve as a primary residence — would be tiered based on a property’s assessed value, according to companion legislation to the proposed constitutional amendment. Under the proposed rates, the annual surcharge would amount to $3,150 for an investment home valued at $700,000, and $6,500 for a property valued at $1 million.
“Our basic philosophy behind this is: It’s a way to make sure that we fund our schools, make sure that we have quality teachers in the classroom, and at the same time, going after speculators that have made affordable housing in Hawaii almost impossible,” Rosenlee said. “If you have a home and that is your one home, you will not have to pay this tax.”
The bill includes more than a dozen exemptions for investment properties, including affordable housing that’s rented for less than $1,500 a month; properties rented to low-income seniors or disabled veterans; Hawaiian homesteads; and properties used exclusively for charitable purposes.
The visitor accommodations tax, meanwhile, would tack on a $3 daily fee for transient accommodations offered for less than $150 per day. The fee would increase to $5 a day for accommodations offered for $150 or more per day.
Last legislative session the union was unsuccessful in its effort to raise the general excise tax to establish a dedicated funding stream for public schools. Rosenlee said by putting the issue to voters through a constitutional amendment, lawmakers would not be put in the position of voting for a tax increase.