Voters will decide at the polls on Tuesday whether to make two modest amendments to the Hawaii Constitution that have been proposed by state lawmakers.
The first amendment is designed to ease congestion in the state court system by increasing the threshold for jury trials in civil lawsuits to $10,000 from $5,000. Cases involving disputes worth less than $10,000 could still be filed in state courts, but would be resolved either in small claims court or through bench trials by district judges.
The change was proposed by state Senate
Judiciary and Labor
Committee Chairman Gil Keith-Agaran, who said it would help move civil cases through the court system more efficiently “while still giving people their day in court at the District Court level.”
Defendants in criminal cases have a right to a speedy trial, which means criminal cases take priority and civil cases may languish in Circuit Court awaiting a jury trial for years, he said. The district courts, which do not have jury trials, can move civil cases faster, Keith-Agaran said.
“The idea is that by raising the threshold, you’ll be able to let some people — anyone who has a claim under $10,000 — get their claim resolved faster,” he said. “The notion is that’s a better use of judicial resources.”
During hearings on the proposal at the Legislature in 2015, only State Farm Mutual Automobile Insurance Co. opposed the idea. Written testimony submitted by State Farm argued that people have a fundamental right to a jury trial even when only small amounts of money are involved.
The threshold for jury trials in civil lawsuits was last increased in 1988 to $5,000 from $1,000.
A second proposed constitutional amendment would specifically authorize state lawmakers to set aside extra money in years when the state has been running a budget surplus to reduce public debt or pay down unfunded pension or health care obligations.
The state has an unfunded liability of more than $9 billion for the
Hawaii Employer-Union Health Benefits Trust Fund, which provides health benefits to public workers, retirees and their families, and has a separate unfunded liability of about $6.2 billion for the public workers’ pension fund.
The state also owes about $6 billion in long-term debt for money it borrowed by issuing general obligation bonds to finance state construction projects.
State Budget Director Wesley Machida has pointed out lawmakers already have the authority to make appropriations to prepay these obligations whenever they like, so it is unclear what practical effect the constitutional amendment would have.
For example, lawmakers and Gov. David Ige’s administration set aside $86 million more than was required by law last fiscal year to pay for future public employee health benefits, and the administration plans to pay almost $98 million more than the required amount for health benefits this year.
Senate Ways and Means Committee Chairwoman Jill Tokuda said the proposed language “is just giving the Legislature another option.”
“If we put a little bit more towards our debt service or towards (pension or health fund obligations), this is something that’s going to be benefiting the state not just now, but in the years to come by reducing the payments that we have for these various debts and liabilities,” she said.
The state Constitution currently requires that whenever the general fund cash balance at the end of two consecutive fiscal years exceeds 5 percent of total revenues for each of those years, the state must either issue a tax refund to residents, or must deposit money into the Emergency and Budget Reserve Fund, also known as the rainy-day fund.
The Constitution does not say how much money must be refunded to taxpayers or set aside in the rainy-day fund, and at times lawmakers have issued nominal
$1 tax refunds to satisfy the requirement.
The proposed constitutional amendment specifies that when there are two consecutive years of budget surpluses, lawmakers can also use the excess funds to help pay off the unfunded health care and pension liabilities, or to pay off the long-term general obligation bond debt.
When lawmakers were considering the amendment in February, Machida testified that nothing is stopping the Legislature from banking money for those pension, health and debt obligations now. “The Legislature can currently prefund these obligations by appropriating funds,” he said in written testimony on Feb. 11.
For the constitutional amendments to pass, they must be approved by a majority of the voters. That means that blank votes will count as “no” votes.
