Counties take property tax ballot question to state Supreme Court

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It’s an issue on the November ballot that’s drawing heated argument from all sides. Should the state be allowed to tax investment properties to raise money for education?

All four counties want the Hawaii Supreme Court to take it off the ballot.

Hawaii voters are being asked 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.

The counties say the question on the ballot is too vague. State lawmakers point out that there’s a good reason for it because it’s the first step in what will be a lengthy process.

Voters will be asked if they are in favor of a surcharge by the state on investment real property to raise money for education. The counties say it’s vague and misleading and could eventually mean taxing the homes we live in.

“There’s no definition in the ballot as to what investment real property is. If you buy a home and you hope that that home increases in value, is that investment real property? We just don’t know,” said city corporation counsel Donna Leong.

She adds that it also doesn’t say whether all the money raised will actually go to the education budget. 

The other side says the counties are misleading the public.

The teacher’s union, which lobbied for the proposal, says the counties are trying to scare the voters against it. HSTA says this is just the first step of many that could raise up to $400 million a year for education.

“Next year, what HSTA is gonna put forward is very specifically second homes over a million dollars dedicated to education to increase overall education funding. That’s what’s gonna be proposed. That’s what they’re gonna be debating about,” said HSTA president Corey Rosenlee.

State lawmakers say constitutional amendment questions on the ballot are written in general terms on purpose.

“Any type of changes to the constitution has to be in a general form so that the details can be worked out at a later point,” said Rep, Sylvia Luke, House Finance Committee chairwoman.

She adds that state lawmakers would be hard pressed to apply the taxes on primary homes.

“Personal properties have at least been seen as sacred for a lot of the residents and legislators as well, and I think that in itself will be an uphill battle,” said Luke.

It would take more “yes” votes than “no” votes to approve the amendment. Keep in mind, if you leave it blank, that is counted as a “no” vote.

The Hawaii State Legislature approved the amendment because it is designed to raise hundreds of million dollars for education.

The counties argue that while the intention is for investment properties of over a million dollars, the wording does not specify the definition of an investment property. Therefore, they say, an investment property could apply to the home that you’re living in right now.

The counties want to invalidate the amendment and stop it from being on the ballot.

With the election just about a month and a half away, time is running out. The counties are hoping that the Supreme Court will consider their filing as quickly as possible.

If the state’s high court accepts the petition, oral arguments may be scheduled.

Corey Rosenlee, president of the Hawaii State Teachers Association, said in a statement:

“The counties are trying to stop the democratic process that would allow the people of Hawaii the opportunity to vote on the Constitutional Amendment that would, for the first time, properly fund Hawaii’s public schools and our keiki.

“The Constitutional Amendment does not take away one dollar from the counties. Instead, the counties are trying to prevent our school system from being adequately funded. Even though this week, WalletHub ranked Hawaii as the worst place for teachers in the country.

“It is disappointing that the counties are wasting tax-payer dollars to fight for wealthy outside investors and illegal vacation owners, rather than Hawaii’s own keiki.”

We will keep you updated on what the Supreme Court does, whether they even take up the case, and if the amendment winds up on the ballot.

Click here to view the entire complaint.

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