Nov. 6th Constitutional Amendment Question: Investment Property Surcharge for Education?

Aug 14, 2018

Investment property surcharge to provide increased funding for public education?
Credit Wayne Yoshioka

The State Legislature is expected to submit a Constitutional Amendment question next week for placement on the General Election ballot.

The Constitutional Amendment question would be, “Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real estate property to be used to support public education?”  Speaker of the House of Representatives, Scott Saiki.

House Speaker Scott Saiki says there's no dollar amount or threshold on real property surcharge.
Credit Wayne Yoshioka

“One thing I should make clear is that the constitutional amendment question does not specify a dollar amount or a dollar threshold.  I know that there’s some discussion that the threshold is $1 million. That is not in the constitutional question so that is not accurate at this point.”

But, Hawai’i State Teacher’s Association president, Corey Rosenlee, says there’s an intended threshold and real estate speculators and trusts are the targets.

HSTA president, Corey Rosenlee, says the intent is to add surcharge to investment properties valued at over $1 million.
Credit Wayne Yoshioka

“The intent is, is that we’re really looking at second homes over a million dollars. We have a teacher crisis right now. We have over a thousand positions that are unfilled; on average our school buildings are 65 years and older; and, we have teachers that are using books that are decades old.”

But, according to the Hawai’i Association of Realtors, there are more than 19-thousand investment homes and condominiums statewide.  Association president, Frank Goodale, says renters would be hit the hardest and the amendment could be unconstitutional.

Hawai'i Association of Realtors president, Frank Goodale, says the constitutional amendment could be unconstitutional
Credit Wayne Yoshioka

“It’s targeting outside investors over a million dollars for paying this tax and it goes for the sole benefit of the schools and the people that live here. And, there’s a question of whether it would pass constitutional muster.  This is an egregious case of taxation without representation.”

Hawai’i Tax Foundation president, Tom Yamachika, says the amendment would provide broad powers to the legislature with unanswered consequences.

“What it doesn’t say is, what happens to the money that is already appropriated for education.  There’s almost like $2 billion that is being appropriated out of the General Fund to the Department of Education.  And, I’m thinking that legislators are going to be under tremendous pressure to reduce that amount.”

Hawai'i Tax Foundation president, Tom Yamachika, questions whether the current Department of Education budget of nearly $2 billion would be reduced if voters approve the constitutional amendment to allow the legislator to assess a surcharge
Credit Wayne Yoshioka

But, House Speaker Saiki says voters -- not lawmakers -- will get to weigh-in on their General Election ballots by November 6th.

“It’s up to the voters to decide, whether or not, they want to create a surcharge on investment real property to provide extra funding for the schools.”

In my next report, the Hawai’i State Teacher’s Association perspective on why voters should approve more funding for public education.  Wayne Yoshioka, HPR News.