The City and County of Honolulu wants a state court to make elections officials re-word the title of the proposed constitutional amendment on education funding that is headed to voters on Nov. 6.
The so-called ballot heading is misleading because it fails to mention that the proposed measure could result in a tax placed on a wide range of investment property, the lawsuit filed by Honolulu Corporation Counsel Donna Leong says.
The title the city is objecting to says simply: “CON AMEND: Relating to Public Education and Investment Property.”
But the complaint, filed last week in Circuit Court, asserts the tax “will have a highly deleterious effect on the City’s ability to raise revenue to support the City’s infrastructure and services.”
Hawaii voters will have a chance this November to decide whether to amend the Hawaii Constitution to allow the Legislature to impose a property tax on investment real estate “to support public education.”
Although the original bill applied specifically to single family homes valued at more than $1 million, the final measure passed by lawmakers applies broadly to “investment real property.” The proposed amendment would allow the Legislature to tax a range of real property used for investment purposes, from large-scale commercial projects like big shopping centers and tony office towers to small storefronts leased to mom-and-pop merchants and apartments rented to low-income residents.
Now, only the counties have the power to impose property taxes; the state raises the bulk of its revenue from a general excise tax imposed on most goods and services sold in the state.
Critics of the measure say the ballot wording is so vague that it’s impossible to tell how much money the surcharge would generate and that there are no specifics on how the tax structure would work.
County officials worry that the measure would siphon needed money away from counties.
Honolulu Mayor Kirk Caldwell’s administration has said that the tax would have an adverse impact on Honolulu’s real estate market since it might dissuade potential investors from investing in higher-priced properties, driving rents up higher overall.
Honolulu wants the court to declare that the ballot heading is invalid, and is seeking an order to prevent the heading as currently worded on the ballot.
The complaint names Lt. Gov. Doug Chin; F.M. Scotty Anderson, chairman of the Hawaii Elections Commission, and Scott Nago, chief election officer. Chin was not available for comment Monday evening; Anderson and Nago also could not be reached.
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