Constitutional amendment: What you need to know about a surcharge for education

Political News

KHON2 partnered with Common Cause Hawaii Tuesday for a special live forum on the constitutional amendment, or con am, for an education surcharge. The forum was streamed live from the Box Jelly coworking space in Kakaako.

Voters will decide in November whether to approve a constitutional amendment allowing for a property tax surcharge dedicated to school funding. The question will say:

“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.

It has become a controversial and contentious issue. A panel of community leaders representing many sides of the issues shared their perspectives and engaged in a civil dialogue about the pros and cons of the con am.

The panelists were:

  • Corey Rosenlee, president of the Hawaii State Teachers Association, in support.
    • “Right now, Hawaii is in educational crisis. Over 1,000 classrooms for the first time do not have a qualified teacher, and we have seen since 2010 the amount of teachers leaving to move to the mainland has increased by 84 percent, which means that one third of our students, nearly 60,000 students every single day do not have a qualified teacher, and the reason why is because we do not fund our schools. We’re 45th in the nation in per people expenditures adjusted for cost of living. We spend $6,000 less than similar districts. The reality is no matter how you look at it, we’ve got to fund our schools. In this debate, our opponents offer no solutions. All they do is offer the same status quo. We need to as a community to fix our schools and this is the best way to do it, and that’s why we’re asking people to vote yes.”
  • Deborah Zysman, executive director of the Hawaii Children’s Action Network, in support.
    • “I’m with Hawaii Children’s Action Network. We are a statewide nonprofit, and we are a movement on behalf of children and families. So we are members, are parents and grandparents and organizations, who care about our children on a variety of issues, so education, health, safety, child welfare. We take positions on things where it’s good for children. That’s kind of the lens of how we decide our work, and we have been fighting now for close to 20 years to improve our schools, to build out our public education, to improve our facilities and, particularly a priority for us, is also getting to public preschool for all of our kids and really investing in early learning, and we are supporting this amendment because we know in order to do that, we will need new revenue.”
  • Colbert Matsumoto, representing the Affordable Hawaii Coalition, in opposition. 
    • “Our group, the Affordable Hawaii Coalition, is a group of diverse businesses and individuals who oppose this constitutional amendment, and we oppose it because it’s an attempt by the Legislature to give itself a new taxing power, and the problem with it is that we already are notoriously highly taxed in this community, and to give the Legislature a new taxing power like that is like giving them a loaded gun, and that’s why we’re concerned about this constitutional amendment, because it doesn’t have any guardrails. It doesn’t have any safety measures to limit what the Legislature is able to do with it, and as a result, it’s likely to result in an impact on already high cost of living and affordability of Hawaii.”
  • Randy Roth, professor emeritus at the University of Hawaii William S. Richardson School of Law, in opposition.
    • “I strongly support public education, but this proposed constitutional amendment has nothing to do with education. It’s about giving the state a new taxing authority with no limitations, leaving it free to pursue its own spending priorities. As written, the Legislature could tax any property in the state. That’s because the word investment in this context is legally meaningless. Even owner-occupied homes could legally be treated as investment real property, because it is. I’m not talking about what the legislators are saying now, or even what they might intend. Give the Legislature a new taxing authority and it’s just a matter of time before the rate goes up and the coverage is broadened. That’s essentially what happened to the transit accommodations tax, the barrel tax, the conveyance tax and a host of other special purpose taxes that have been used for completely different purposes than originally promised.”

This amendment has been called contentious, even confusing in its language by some. Each side represented here has firm beliefs in why to support or oppose it. Explain what this measure means exactly, and what the result of a yes vote and a no vote would mean.

  • Roth: “This purports on its face to be about public education, and so a lot of us who feel strongly about the importance of public education were initially drawn to this proposal because we want to help public education, but that’s not what it’s about. There is absolutely no guarantee, and I would suggest it’s almost certain that there won’t be an increase in public education spending simply because this would pass. I think what this is is just a box of blank checks that the Legislature is asking for because they’ve got other things in mind for the new revenue.”
  • Zysman: “A yes vote would open the door to further conversation about how we will tax properties, and it does say on the ballot question very specifically that funds are for public education, so I think this is the first step. Without it, we know there will be no further debate on if we should use property tax for public education, exactly how to do that. The next step would be then that the Legislature will need to pass additional legislation on exact rates, and I know questions have been asked about where do we use those funds. Those are the next steps in the conversation, but again at the end of the day, our basic belief is that our schools are underfunded. In order to build out the sort of early education system that we need in Hawaii, we need new revenue, and so I think we’ve been working out for numerous years and exploring the whole host of different revenue streams. This is a good, viable one.”
  • Matsumoto: “The problem with the constitutional amendment is that what is on the ballot is not what was originally intended. The language that I have in front of me reflects what was originally intended for this amendment. As you can see, what the Legislature did was they took out all of the guardrails, all of the provisions that would have specified both the sources on which would be taxed, taxable, as well as how the money was supposed to be spent, and so as a result, this is really, as Randy says, by giving the Legislature not just a blank check but a checkbook full of checks for them to use to continue to tax and raise money for whatever purpose that they want to utilize it for, and that’s why this amendment should not be approved, because it doesn’t achieve the intent that the original proponents wanted it to achieve.”
  • Rosenlee: “A yes vote is for our keiki. Every day, they go to school and the question is this: Does every child, regardless of where they live, what their ethnicity is, how much their parents make, do they deserve a quality education? Right now, unfortunately, for too many of our kids, day after day, they’re denied a quality teacher, a classroom that’s not a hundred degrees, not sitting in a class room with 40 other kids. What do our opponents offer? The offer is the status quo, and they’re representing the wealthiest among us, corporations, outside investors, and you can see what money can do, and in this case, money tries to buy fear. The idea that this is going to go off the rails. This is very simple. Are we willing to tax second homes over a million dollars in order to make sure that every child has a quality education?”

Additional questions were addressed as follows:

2. If this measure does not pass, how could the state provide more, better targeted, and school-designated funding for education?

3. If this measure does pass, how can it be assured that the money raised would be added to the existing state budget amount for education, and not just considered a substitute source to pay toward the current general-fund amount schools get?

4. If this measure does not pass, what other resources or efforts exist to stem the tide of teacher turnover and recruitment challenges that are often blamed on the high cost of living for educators?

5. If this measure does pass, how specifically will it be determined and defined what types of properties will be taxed and at what amounts, and by when will this decision be made and be known to the voting public?

6. If this measure does not pass, what else can be done to help guarantee more or better targeted spending to improve classrooms and facilities?

7. The state has a history of redirecting and raiding special funds, and redefining who gets how much from a tax, even stretching sunsets well beyond their horizons. If the measure does pass, how can it be assured that the accrued money will be spent as intended toward public school education, and not redirected, raided, or redefined toward something tangentially education-related?

8. Some big money and muscle are behind public awareness initiatives on both sides of this matter, among the groups represented here from the HSTA teachers union supporting and seeking YES votes, and the Affordable Hawaii Coalition opposing and seeking NO votes. Explain where each of your organizations gets their money and their grassroots support for its position and messaging.

9. Counties have come out in strong opposition to this, even filing suit in a matter that the state Supreme Court will be taking up just two days from now on Thursday which could end up invalidating the measure on the ballot. If you were in the courtroom and had to plead a case to the justices, what would you say to try to convince them to keep the ballot measure active or to invalidate it as the counties seek?

10. Another ballot measure up for vote is whether to hold a Constitutional Convention, where topics such as educational funding could also be addressed. State whether you advocate a yes or no vote on that, and explain why others should vote that way.

11. In our KHON2 governor’s debate last night, we asked Gov. David Ige, D, and his challenger Rep. Andria Tupola, R, several questions about this con am and asked for pledges on how they’d handle it if it passes and he or she is governor.

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Gov. Ige said he supports the measure because:

  • Public education’s needs exceed available funds,
  • We’re the only state where no property tax helps schools; and
  • He feels it’s a simple question for income and investment properties.
  • His pledge is to veto any measure that increases property tax for residents, or that does not guaranty revenue would be in addition to what’s there and would be guaranteed to go to teachers students and classroom; none of the taxes would be on affordable rentals. He plans to monitor that by using the homeowner exemption to delineate who would be exempt.
  • He said the intent is to tax investment and income properties over $1 million, and he would add an exemption for affordable rentals.

Rep. Andria Tupola says she is against any tax hike, including this one because:

  • The con am’s definition of investment properties ambiguous as to whether it could tax businesses and local rentals and ambiguous on what defines educational purpose with no guaranty it would go to salaries or the weighted student formula.
  • She said a whole new department could be required to administer the tax; and
  • She instead wants to audit the DOE on where it’s spending now.
  • Tupola’s pledge if con am passes is to ensure the money goes to the weighted student formula or teacher salaries and no additional dollars to administration or the general fund.
  • She says defining what is a surchargeable property would have to start with the counties and make sure they are outside owners, not housing local families or local businesses.

Please respond to what the candidates for governor said as to the impact their pledges have on your position and arguments.

12. Con am aside, whether this does or does not pass, what initiatives have or will you and the people or groups you represent today pledge to do to support sufficient and effective funding for Hawaii’s public schools?

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