The Hawaii Supreme Court invalidated a ballot measure Friday for a constitutional amendment that would have given the Legislature the power to impose property taxes to support public education.
Justices ruled that the ballot language was not clear enough. The scope of property subject to the new tax and how the revenue would be spent were not specified.
The order is a victory for Hawaii’s four counties, which currently have the exclusive right to impose property taxes. And it denied the Legislature a new source of potential funding to pay for Hawaii’s statewide school system. Lawmakers now pay for the schools through general fund revenue, primarily a general excise tax imposed on most goods and services.
The court’s order offered little insight into its reasoning, saying simply that the “ballot question as written does not comply with the requirements of HRS § 11-118.5 that the language and meaning of the ballot question be clear and not misleading.”
Accordingly, the court said, “The Chief Election Officer shall issue a public proclamation stating that the ballot question is invalid and that any votes for or against the measure will not be counted and will have no impact.”
The court said a written opinion detailing its reasoning would follow. Meanwhile, lawmakers who had crafted the ballot language expressed disappointment.
“It is disappointing the Supreme Court will not allow the public to vote on this question,” said House Speaker Scott Saiki. “The Legislature vetted this proposal over the past two years. The Supreme Court should have deferred to the legislative process.”
In a news conference Friday, Honolulu Corporation Counsel Donna Leong commended the court’s decision.
“Clearly the questions that were posed by the court … showed that they had carefully considered the arguments of both parties, the state and the counties, as well as all the cases cited in those briefs,” she said. “Their questions were just spot on.”
Corey Rosenlee, president of the Hawaii State Teachers Association, said the organization would keep lobbying for more money for the public schools.
“While we are sad about the ruling, there is still an urgent need that students have a qualified teacher and sufficient school funding to provide our keiki with the learning environment they deserve,” he said. “The fight for our schools does not end with the Supreme Court ruling; all of Hawaii must ask that our elected leaders work to ensure that our schools are properly funded.”
Gov. David Ige, who had voiced support for the measure, issued this statement Friday:
The Court’s ruling on the Legislature’s amendment means we must keep searching for a way to support the dedicated teachers and staff who make a difference every day in classrooms around the state. I am committed to doing just that.
The order came just a day after the court heard a 90-minute oral argument from Leong and Maui Deputy Corporation Counsel Brian Bilberry calling for invalidation of the measure, and from Hawaii Attorney General Russell Suzuki arguing that the court should allow it to go forward.
Although the court’s analysis will not be clear until it releases its opinion, the questions presented by the justices during oral argument showed they had concerns about the clarity of the ballot language.
In a series of probing questions to Suzuki, the justices minutely parsed the 24-word ballot statement, which reads, “Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”
Even though the ballot measure would have changed the constitution to give the Legislature the power to impose a state property tax, lawmakers still would have needed to pass legislation detailing the exact nature of the tax. Proponents of the measure, such as the teachers union, repeatedly said such a law would tax only rich out-of-state investors renting out luxury houses.
But during the questioning from justices Thursday, Suzuki conceded that residential property owned by local people could be taxed. Justice Sabrina McKenna pushed Suzuki to further concede that there was nothing in the measure to ensure that a property tax would result in a net increase in money for education.
“Nothing would prevent the Legislature from funding education exclusively with real property surcharges,” McKenna said at one point.
“That’s a possibility,” Suzuki said.
The case is likely to provide insight into a key, unanswered question of just how clear a ballot question put to the voters must be.
Currently, the Hawaii statute says only that, “The language and meaning of a constitutional amendment shall be clear and it shall be neither misleading nor deceptive.” And Hawaii courts have not interpreted the law to define “misleading or deceptive.” The opinion is likely to do that, and could provide key guidance for future ballot measures.
More immediately, though, the case does something more fundamental by reserving for the counties the exclusive right to raise revenue by taxing property.
“The real property tax is the only constitutionally dedicated source of revenue for the counties,” Leong said. “That’s the only bucket of money that we can rely on to support all of the good services, the operations, the services, the capital improvement projects that the counties undertake, and so we need to protect our sole constitutionally dedicated source of revenue.”
Marcel Honore contributed to this report.
Read the Supreme Court’s decision below.
Counties v State Order Re Pet for Extraordinary Writ 101918 (Text)
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