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If there was one shared sentiment Monday following the Hawaii Supreme Court’s Friday decision to invalidate a proposed constitutional amendment to impose a state tax on investment property for public education, it was disappointment.
Disappointment from the measure’s main backer, the Hawaii State Teachers Association. Disappointment from state officials, including the governor, who had voiced support for letting people vote on the question. And even disappointment from some of the ConAm’s most vocal opponents in the business community.
“There was a short sigh of relief,” Colbert Matsumoto, chairman of Island Holdings, said Monday of the ruling, “but I was also disappointed.”
He said he wished voters had the chance to weigh in on a “divisive” measure that he said would have harmed renters and other residents.
In the immediate aftermath of the high court’s decision to strike down the so-called ConAm for not being clear enough in its wording and intent, supporters and opponents expressed a desire to move beyond the fractious debate and collaborate to find common ground on education spending.
A lingering point of dispute is whether the Hawaii Department of Education requires additional funding or simply needs to more efficiently manage its existing $2 billion annual budget, mostly comprised of state general funds.
The ConAm proposed amending the state constitution to allow the Legislature to impose a tax of an undetermined amount on certain investment property to help fund public education. While HSTA argued only nonowner-occupied investment property worth $1 million or more would be impacted, opponents pushed back that any kind of property could potentially be taxed, pushing costs onto everyday residents.
Hawaii’s four counties, which led the legal challenge, have the sole authority to tax property. Their emergency petition to the Hawaii Supreme Court to strike down the ballot measure was based on the argument it wasn’t clear to the average voter that the proposed “surcharge” was actually a “tax” or which investment properties would actually be impacted. They also said giving the state a new taxing authority would harm their bond ratings to fund their own operations.
The court — which has not yet issued a written opinion explaining its rationale — ordered the Hawaii Office of Elections to issue a proclamation declaring all votes on the ConAm void. Mail-in ballots have already arrived in many homes for the Nov. 6 election.
It’s not clear whether the HSTA, which led a two-year effort to get the ConAm on the ballot, will continue to pursue this vehicle to boost spending for public schools.
“We really want to sit down and talk to people about what’s next,” HSTA President Corey Rosenlee said following a Monday morning press conference at McKinley High School that also featured remarks from Gov. David Ige, Superintendent Christina Kishimoto and Board of Education Chairwoman Catherine Payne. “If we can build a broader coalition, everyone’s got to give something.”
The HSTA, which is the collective bargaining unit for 13,700 teachers and support staff, says that public schools are severely underfunded, leading to a shortage of qualified teachers and neglect of badly needed repairs to aging school buildings.
Kishimoto, the top administrator of the education department, which includes 292 schools serving about 179,000 students statewide, waded into the funding issue.
“I’m not able to keep up this work if I’m not able to pay my teachers competitively,” she said, adding Hawaii ranks in the “bottom 10” in the country when it comes to teacher pay.
State Senate Education Chair Michelle Kidani, a supporter of the ill-fated ConAm who helped muster support among her colleagues when the proposal was moving through the Legislature, said she was disappointed in the counties for pursuing legal action.
She said the tax measure had been “watered down” by the time it was voted out of the House, and that it was incumbent upon her fellow policymakers to “step up to the plate” by supporting public education in future sessions.
Earlier versions of the ConAm had specified the state surcharge on property would only apply to second-home investment properties worth $1 million or more, but by the time it was passed out of the House, all specifics had been stripped from the language.
Across town several hours later, representatives of the political action committee that campaigned against the ConAm, the Affordable Hawaii Coalition, held court at the Dole Cannery building to say what comes next.
“We want to continue working together to better the public education system,” said Stanley Lau, owner of Hawaii Tech Support and chairman of the PAC.
He said afterward that his group, which seeks to address cost of living concerns in the state, was open to meeting with supporters of the ConAm to explore collaborations on public education. What that could look like, however, is still unclear.
Randy Roth and Ray L’Heureux, members of Education Institute of Hawaii, a think tank, said it was important to first figure out whether existing funds were being used effectively by the DOE before fighting for additional funding.
“This community has a lot of needs in addition to having a top-notch education system,” said Roth, a retired law professor at the University of Hawaii Manoa. “There’s a lot of people who believe $3 billion in operations are enough.” (Roth argues that when factoring in unfunded liabilities and fringe benefits, the DOE budget is actually $1 billion more than what’s publicly stated.)
Roth and L’Heureux are trying to collect data from the department to build a tool to help the public determine whether state DOE dollars are being properly spent.
At the most recent Board of Education meeting, the DOE budget team presented its proposed biennial budget for 2019 to 2021.
The department is setting its sights on “realigning” funds with a focus on things like teacher recruitment and retention, substitute special education teachers and applied behavioral analysis.
Matsumoto, a member of Chamber of Commerce Hawaii, which gave $600,000 to the Affordable Hawaii Coalition to oppose the ConAm, said the business community has been “extremely generous” in its donations to public schools, including hundreds of thousands of dollars each year from The Public Schools of Hawaii Foundation.
In addition to the Chamber’s $600,000 contribution, the PAC raised more than $150,000 from outside parties, including real estate investment companies, Realtors and insurance firms.
Lau said the Affordable Hawaii Coalition is still calculating how much is left of total contributions. Under Campaign Spending Commission rules, the PAC must now dissolve and divest itself of any unused funds.
Through the first reporting deadline of Oct. 1, the HSTA had poured $500,000 into a campaign in support of the ConAm and received $100,000 from its parent organization, the National Education Association.
The Supreme Court’s Friday decision was the first time a ballot question has been invalidated by the state judiciary ahead of an election, said spokeswoman Nedielyn Bueno.
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