A court ruling against Hawaii’s four counties’ lawsuit to block a proposed constitutional amendment suggests that the legal challenge is arbitrary, as well as a hypocritical attempt to prevent the state from sharing its revenue pie to help improve public education.
First Circuit Judge Jeff Crabtree recently ruled against the counties’ motion to block from the November ballot a proposed amendment to allow the state to tax investment property.
Crabtree ruled that the counties didn’t meet the standards required for granting a preliminary injunction, including a require- ment that they are likely to win. Rather, he said, the counties are unlikely to prevail in the case.
Why? The counties argued that the ballot question is misleading and deceptive, citing the verbiage, “Shall the Legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?”
The counties maintained that the word “surcharge” is misleading because it doesn’t make clear that it is really a tax, and that “investment real property” is ambiguous. Really? How frequently do the counties use that phrasing? The general excise tax surcharge to pay for Honolulu’s rail comes to mind. And how about the counties’ cut for the hotel room tax?
“I do not find the proposed language is deceptive,” Crabtree said. “Is the language as thorough and definitive as one would like? No … This language is not as clear as it could be. That said, (the statute) does not require that the proposed constitutional amendment contain a detailed description of all the issues and possible effects connected to the proposed amendment.”
In fact, a constitutional amendment cannot contain tax rates and such. That is left to law that provides enabling language. The county lawyers know that, just as they know that they can bamboozle the public with their own brands of legalese.
The hypocrisy is not just regarding that lame argument about language. Currently, the state Constitution allows only the counties to levy property taxes. If a simple majority of voters in November approves the changes to the Constitution, it will then fall back to the Legislature to determine whether it wants to raise property taxes in support of public education, and to work out the the language.
In essence then, even though the county governments want to share in state tax revenues, they don’t want the state to touch their cash cow. Call it like it is.
The counties and Realtors are the organized opposition to the amendment. Realtors claim that passage of the amendment would hike housing costs, and undermine affordability. The hypocrisy of this is truly abominable. Housing is expensive in Hawaii because the real estate industry is only too eager to market investment property off-island by noting what a bargain bonanza it is with the current low property tax rates.
The proposed amendment is clear on what is to be taxed: investment property. So which side is really being deceptive?
We on Maui know all too well what marketing to off-island real estate speculators has done to the availability of housing. It has been widely reported that 70 percent of property sales the past couple of years have been to non-residents. That has translated into a severe housing shortage. Supply and demand dictate the high cost of housing here. Teacher shortage? You bet. Bright, young teachers find themselves struggling to find any housing, particularly any that’s affordable on their entry-level salaries.
So when I hear brokers warn that the proposed con-am will increase the cost of housing, it falls on deaf ears. Since when have they cared about the consequences of their marketing?
Alan Isbell is a fourth-grade teacher at Wailuku Elementary School on Maui.