The Hawaii Supreme Court has agreed to hear arguments on October 18th on whether to allow voters to decide if the state can collect property taxes on investment property to raise money for education.

A question currently on the ballot will ask Hawaii voters if they want to give the State of Hawaii the power to impose a real property tax on investment property:

“Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”

Click here to learn more about the proposed amendment.

All four counties want the high court to strike it down because they say the term “investment property” is too vague, and could be applied to primary homes as well as businesses.
State lawmakers say constitutional amendments are written in general terms because specifics will be ironed out if the voters approve it. The teacher’s union, Hawaii State Teachers Association, which lobbied for the proposal, says there’s nothing wrong with it.
This comes as both sides turn up the heat to sway the voters.

Those against the constitutional amendment say if the voters approve, it would be hard to turn back because it becomes law. Those in favor of it say opponents are using scare tactics, and should instead come up with a solution to improve education.

HSTA points out that there are too many schools in disrepair, and says inadequate wages are forcing teachers to move away. So the proposal in the ballot box can raise $200 to $400 million a year. 

Those against the amendment agree that money is needed for education. But say a ballot measure is not the way to do it.

“This could have an impact on everyone. Cost of living increases, cost of doing business increases, and once a constitutional amendment is in place it’s so hard to reverse,” said Sherry Menor-McNamara, president of the Chamber of Commerce of Hawaii.

“We will be putting in language that is specifically for second homes over a million dollars and that has been the intent of the legislature in the many years that we have pursued this,” said Corey Rosenlee, HSTA president.

HSTA says it can all be worked out with the legislature and exemptions can be made so out of state investors are paying the extra tax. But opponents ask what happens in the years ahead when new lawmakers are in the Capitol?

“Five years, 10 years, 15, 20 years from now, those legislators are gone and they can interpret this amendment any way they want because there are no barriers, no boundaries, no holds on what it means,” said Honolulu Mayor Kirk Caldwell.

Opponents say it would make more sense to audit the funding for schools to see if money is being spent wisely. But Rosenlee says that will lead to more delays when the money is needed now.

“The reality is, and any teacher can tell you by the conditions that we have in the classroom, and you can look at the buildings, that we have we are not well funded and the audit is just an excuse and one more road block to make sure we don’t fund our schools,” he said.

A recent study by WalletHub found Hawaii to be the worst state for teachers in the nation. Hawaii also comes in as the state with the lowest annual salary based on cost of living.

It will take a majority of “yes” votes to approve the amendment. Keep in mind that leaving it blank counts as a “no” vote.