Voters will see on the November ballot a measure seeking to generate public education funding through a surcharge tax on high-value residential investment properties.
State Senate Bill 2922 will ask voters to approve a constitutional amendment to create a surcharge targeting “investment real property” valued at $1 million or more and if the owner does not qualify for a homeowner’s exemption.
Revenue would be used partly to help mitigate the state’s teacher shortage by increasing teacher pay and finding new ways to recruit and retain them, according to Corey Rosenlee, president of the Hawaii State Teachers Association, which championed the bill.
“One-third of all property taxes are paid by nonresidents, and 50 percent of all homes were bought by nonresidents,” Rosenlee said Monday. “The problem that’s occurring is when you take that much supply out of the market, it’s driving up the cost of living for (residents). Hawaii is the only state that does not use property taxes for education, and we have the lowest tax rate.”
HSTA backed a similar “education surcharge” bill last year, but it died. Rosenlee said this year’s bill was drafted to include fewer specifics — it doesn’t specify a surcharge amount — and aims to “improve education in the state” and “give the people of Hawaii a chance to create a dedicated fund for education.”
The surcharge amount would be determined by the Legislature.
The bill received opposition from many people in the state’s visitor industry.
Mufi Hannemann, president of Hawaii Lodging and Tourism Association, said in written testimony that “higher taxes and fees harm our ability to compete.”
Guests now pay a 10.25 percent transient accommodation tax after the state increased it last August, Hannemann said, and neighbor island guests pay 14.41 percent in taxes.
“Hawaii has reached the point where high business costs and tax rates make it increasingly difficult for business to be profitable and competitive,” Hannemann said in his testimony.
Hawaii County Mayor Harry Kim also testified against an earlier draft of the bill. Kim said property tax is “virtually the only tool we have” and a surcharge would “limit county options and make it even more difficult to balance our budgets.”
“Therefore we have to jealously guard this taxing authority,” Kim said. “ … No matter what the potential benefits of (the bill), impinging on the counties’ singular source of income would be devastating to us.”
The bill cleared the House and Senate last week. It does not require approval by Gov. David Ige. It will instead appear as a ballot measure in the Nov. 6 general election. In order to pass, it will require a higher number of “yes” votes than “no” votes and those who decline to answer.
Several other education-related bills are awaiting a final reading today and likely are headed to Ige’s desk. They include:
• House Bill 1938, which would increase the fine to $1,000 for overtaking a school bus on a state highway if the bus is stopped and its signals are turned on.
• HB 1489, which would prohibit discrimination on the basis of gender identity or expression and sexual orientation in any state educational program or activity that receives state funding.
• HB 2607, which would develop a statewide public computer science curricula.
• HB 2025, which would establish a composting grant pilot project in public schools.
Several education-related bills also died in the current session of the Legislature.
Among them is HB 2117, which would have capped the number of standardized tests students take each year. Many public school teachers supported the bill and argued test-taking and preparation were detracting from time spent teaching other subjects.
Waiakea High School teacher Mireille Ellsworth said Monday that many teachers plan to continue advocating for a testing limit next year.
“There’s no research that really shows that those test scores even come close to predicting how someone will do in college or their career,” Ellsworth said.
Other education bills that are dead or likely to die this week include:
• SB 2380, which would add a nonvoting, public school teacher representative to the state Board of Education.
• SB 2576, which would add interior locks to all classroom doors and mandate all schools have emergency management plans that are updated yearly.
• SB 2381, which would allow school principals to close their school because of natural disaster without first needing to consult the complex area superintendent.
• SB 318, which would allow home-schooled students to participate in extracurricular activities offered at the public school they would otherwise be required to attend.
Email Kirsten Johnson at kjohnson@hawaiitribune-herald.com.