Hawaii’s four counties are seeking to strike a question from ballots in the November general election. The ballot measure would give voters the chance to amend the state Constitution by
allowing the Legislature to tax investment real estate to support public education.
Currently, the state Constitution only allows the counties to levy property taxes.
Supporters of the ballot measure, including the
Hawaii State Teachers
Association, said voters should be allowed to decide whether to give the state
authority to raise property taxes to fund chronically underfunded public schools.
But officials for the counties said the wording doesn’t make clear to voters that the Legislature is seeking an additional taxing power on real estate. They argued that allowing the state to levy property taxes could hurt the counties’ ability to raise revenue in support of infrastructure and services.
Officials with the City and County of Honolulu filed the lawsuit last week, but substantially expanded their
legal arguments Wednesday, in addition to filing an amendment that allowed the other counties to join
in the lawsuit.
The Legislature overwhelmingly passed the proposed amendment to the state Constitution in May and voters are currently poised to the see following question on their ballots:
“Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”
If a simple majority of voters approves the changes to the Constitution, it will then fall back to the Legislature to determine whether they want to raise property taxes in support of public education, and to work out the specifics of the tax.
Honolulu Corporation Counsel Donna Leong said the question, as well as the Office of Election’s title for the ballot measure, was too broad to conform to legal requirements that it “be clear and neither misleading or deceptive.” She said during a press conference Wednesday that the question should be stricken from November ballots because it wasn’t possible to amend the wording of the question, a power that rests with the Legislature, which isn’t in session.
Leong also said the phrase “investment real property” is vague, making it unclear exactly what property the state could tax.
“We don’t think voters will clearly understand the effect of their ‘yes’ vote or ‘no’ vote,” said Leong. “For example, when someone buys a residential property as a home all of us hope that the property will appreciate and that we’ll build our equity in the property. Is this investment real property?”
HSTA President Corey Rosenlee swiftly blasted the lawsuit following the city’s news conference, saying it was frivolous, a waste of taxpayers’ money and that city officials “should be ashamed of themselves.”
“One of the things that we need to recognize right now is we do have an educational crisis in Hawaii. We have 1,000 classrooms that don’t have qualified teachers. About one-third of
students go to school every day and don’t have a qualified teacher,” said Rosenlee. “We have got to increase funding. The only question is how are we going to do it. Are we going to ask the wealthiest among us to do it or not?”
Rosenlee said that while the language of the proposed changes was necessarily broad, the intent was to tax only second homes valued at more than $1 million.
House Speaker Scott Saiki called the arguments in the lawsuit, including one that claims the Legislature didn’t follow proper procedures in passing the proposed constitutional amendment, “weak.”
“What we have heard anecdotally over the years,” Saiki said, “is that the public supports more taxes to fund our schools. So this constitutional amendment tests that assumption.”