Constitutional convention, tax increase for education on Nov. 6 ballot

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In addition to deciding whether the state should hold a constitutional convention, Hawaii voters on the Nov. 6 general election ballot will be asked to consider a precedent-setting change that would move some of the county’s exclusive power to charge real property taxes to the state’s domain.

Thursday was the deadline to submit the ballot language to the state Office of Elections.

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

The ramifications of constitutional changes underlying the question are more complicated.

Currently, the constitution states, “all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties.” If the ballot initiative passes, this wording will be appended, “provided that the legislature may establish, as provided by law, a surcharge on investment real property.”

The amendment further goes on to add, “Funding of public education shall be determined by the legislature; provided that revenues derived from a surcharge on investment real property pursuant to section 3 of article VIII shall be used to support public education.”

The constitutional change leaves it up to a future Legislature to set the amount of the surcharge, define what constitutes “investment real property” and detail what would qualify to “support public education.”

The Legislature overwhelmingly supported this new source of revenue, with only one lawmaker in either the House or Senate — Sen. Gil Riviere, an Oahu Democrat — voting no.

Proponents of the measure, including the Hawaii State Teachers Association, the Hawaii Teachers Standards Board, Hawaii Appleseed Center for Law &Economic Justice and a host of educational and progressive groups, say a dedicated source of funding is needed to improve education in the state.

Hawaii has the lowest property taxes in the nation, enabling out-of-state buyers to purchase expensive properties for future investment, proponents say. At the same time, the almost $2 billion education budget, a per-pupil expenditure of $12,855, puts the state at the bottom of education spending when cost of living is taken into account.

“Our children are our future. When teachers instruct their students, we build the foundation for equality and prosperity for tomorrow’s generations,” said Anne Frederick, executive director for the Hawaii Alliance for Progressive Action. “Every dollar invested in our community’s public schools yields exponential returns, not just for our economy, but for the promise of a more open and democratic society.”

County mayors, council members, real estate associations, hotel and lodging groups and resort groups oppose the measure. Opponents say a new tax will have a domino effect, increasing prices across the board and making the islands even less affordable. They also worry about the lack of specificity in the amendment language, saying it leaves too much room for legislative interpretation.

Mayor Harry Kim, in April 3 testimony to the Legislature, acknowledged the measure has “some superficial political appeal, tied as it is to better funding for education.” But he said impinging on the counties’ primary source of income would be “devastating to us.”

“The burden of the property tax can be heavy for many residents, but since it is virtually the only tool we have, we use it the best we can. A surcharge on residential investment properties would obviously limit county options and make it even more difficult to balance our budgets,” Kim said. “Therefore, we have to jealously guard this taxing authority, and ask that you not break this bright line of separation.”

The other question on the ballot deals with a constitutional convention.

The constitutional convention question also is straightforward: “Shall there be a convention to propose a revision of or amendments to the Constitution?”

There hasn’t been a constitutional convention in the state since 1978. If voters approve a convention Nov. 6, the issue next goes to the state Legislature, which would decide the process of electing delegates. Delegates would be on the ballot in early 2020, and any proposals they make would be on the 2020 general election for the public to decide.

Delegates at the convention could propose any number of changes to the state constitution, from term limits for legislators to changes to the state Sunshine Laws or anything else proposed and passed by convention delegates. All measure must get a final vote by the public at the general election.

There were 34 ballot proposals by the 1978 convention, all of which passed. They included term limits for the governor and lieutenant governor, limits on state borrowing and spending, creation of the Office of Hawaiian Affairs, revamping the court system and increasing privacy rights of individuals.

The constitutional convention is on the ballot, not because the Legislature chose to put it there, but because the constitution requires the question be considered every nine years whether the Legislature puts it on the ballot or not.

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.