INTRODUCTION

Even in tough times, virtually everyone agrees that public education should be among the state’s highest priorities when it comes to funding.

So why are the mayors and councils of all four counties, the Office of Hawaiian Affairs, the state tax director and even the schools superintendent expressing concern over legislation that promises to tap into a potentially lucrative, self-sustaining revenue stream dedicated exclusively to fixing public schools — and to do so without taking so much as a penny from any other existing program?

In a word: land.

Senate Bill 1385 SD2 and House Bill 952 HD1 call for creation of a public schools land trust similar to those in 26 states. If it passes as it is now written, the legislation will be sweeping: On July 1, all land upon which public elementary and secondary schools are situated — except Hawaiian homes land, federal land or privately-owned land — would be designated "public school trust land."

No later than July 2013, all deeds and titles would be transferred to the trust and a governor-appointed commission would be empowered to redevelop, sell or lease unused parcels — perhaps a campus that has been closed — to generate money to pay for public school construction, repairs and upgrades.

"Building, repairing, and retrofitting our public schools to meet the challenges of the twenty-first century and beyond will not be easy, and the costs will be considerable," the bills say. "However, a quality school infrastructure is essential … (to) prepare our children to succeed in today’s highly competitive economy.

"The considerable amount of underutilized public school lands on the state’s 257 school campuses is an untapped resource that lies easily within our reach. … By way of illustration, a preliminary review by a real estate expert indicates the redevelopment of ten parcels (has) the potential to generate $120,000,000."

The intriguing idea is moving forward in the Legislature — despite myriad concerns over land grabbing, ownership titles, implementation and growing bureaucracy.

Indeed, as Department of Education Assistant Superintendent Randy Moore acknowledges: "Ownership of Hawaii schools is very complex."

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More than half of Hawaii’s 257 public school campuses are over 50 years old and showing their age — in functionality as well as appearance.

Many were built in the 1950s, and in the style of the times, were designed around a large central yard or playground. Classrooms on the perimeter were single-story wood or hollow-tile structures. There was an administration building, a cafeteria and sometimes a multi-purpose hall or gym.

In their day — before the demand for broadband connectivity, the outcry over lack of air conditioning or the fallout from shifting population bases that filled some campuses to overflowing and turned others into ghost schools — they served their purpose.

These days, say supporters of Senate Bill 1385 SD2 and House Bill 952 HD1, that’s no longer good enough.

The legislation, which could produce a watershed mandate for government consolidation of land, was researched and proposed by the Hawaii Institute for Public Affairs, a nonprofit think tank, and introduced by education committee chairpersons Sen. Jill Tokuda and Rep. Roy Takumi.

If it becomes law, deed and title to all land under public elementary and secondary schools would be transferred to the state with no compensation and incorporated into what will be known as the Hawaii Public School Lands Trust. Hawaiian homes land, federal land and private property would be exempt, essentially leaving the four counties as the land owners with the most to lose.

An appointed commission would lease, sell or redevelop parcels of trust land — a campus that has been closed, perhaps, or a portion of a playground — with revenues going to a special fund dedicated to paying for public school construction, repairs and upgrades.

On Tuesday, in the first legislative crossover, the Senate and House exchanged virtually identical versions of the bills.

Seizing land to create a trust might seem like a drastic measure, supporters acknowledge, but they argue that it is the kind of out-of-the-box thinking that hard times call for.

Today’s aging facilities require constant and costly upkeep and improvements, and tomorrow’s schools could be dramatically different places of learning. Instead of multiple buildings spread over 20 acres, the new school might be vertical and self-contained.

A single, multi-story building would occupy less land. Energy use and climate control would be more efficient. Classroom and office space could easily be manipulated to suit varying needs. Single-point entry and exit would enhance security, so the school could remain open late for night classes and other activities — or be locked down and sealed off quickly in the event of an emergency.

This, of course, would require vast sums of money the state does not have. Thus, making maximum use of available assets could be an answer, the bills maintain: "The considerable amount of underutilized public school lands on the State’s two-hundred fifty-seven school campuses is an untapped resource that lies easily within our reach. … By way of illustration, a preliminary review by a real estate expert indicates the redevelopment of ten parcels (has) the potential to generate $120,000,000."

No one objects to the intent of the land trust, which promises what Tokuda calls "a sustainable long-term funding source" for public schools that doesn’t take away from any other government program.

But when it comes to land in Hawaii, it is all about ownership — and that is where the battle lines are being drawn.

In Arizona, whose land trust policies were the model for SB 1385 and HB 952, public school lands have always belonged to the state. What’s more, Arizona has lots of land, approximately 113,400 square miles, of which the state owns about 13 percent, or just over 9 million acres.

Arizona’s public schools benefit from the largest share of trust land — 8.4 million acres, which produced $38 million in earnings from lease revenues and interest in 2009-2010, bringing its special-fund balance to nearly $130 million, according to the Arizona State Land Department.

In contrast, Hawaii’s public school lands comprise approximately 4,000 acres. Critics of the land trust concept say the bills’ revenue projections simply don’t pencil out here.

Counties used to be responsible for building public schools in Hawaii, so schools were built on county lands. The state took over school construction in 1967, but ownership of the land upon which counties had built schools was never transferred.

All four counties oppose the land-trust legislation and say it would force them to relinquish large amounts of valuable acreage — in particular, parks that were built on properties adjoining schools but share the same tax map key. They say loss of county park space could hurt after-school programs, organized sports leagues and other activities essential to the fabric of a community.

On Oahu, the city stands to lose more than 900 acres tied to 111 school sites.

"These bills are silent about any desire to subdivide (school-park properties) or to protect the park use," City Councilwoman Tulsi Gabbard Tamayo told the Star-Advertiser in an e-mail from Washington, D.C., where she was attending a conference. "The current amount of park space is not sufficient to meet current demand. … In urban Honolulu especially, there are no vacant lands that could be used to replace the lost park space."

Tamayo says the bills’ lack of this kind of detail when it comes to implementation worry her.

"Ownership of Hawaii schools is very complex," DOE assistant superintendent Randy Moore told the House Finance Committee last week.

"There are schools entirely on county land. There are schools entirely on state land. There are schools where the property lines … for example, at Waianae High School, the property line runs diagonally across campus and through buildings. There are schools where part of the land is ceded and part is not."

In the case of just-closed Liliuokalani School, Moore told the committee, the state and the city both have produced papers indicating ownership of the land.

The Office of Hawaiian Affairs estimates that as many as 121 schools are likely on ceded lands, which could be sold by the land trust commission. In written testimony, OHA maintains "the state cannot diminish ceded lands corpus until the Native Hawaiian people’s claim to (nearly 2 million acres of) ceded land has been resolved."

State Budget Director Kalbert Young, whose department would administer the land trust, and Department of Land and Natural Resources Chairman William Aila, whose department would have administrative responsibility for the land trust commission, both have expressed concerns about implementation of the proposal.

Schools Superintendent Kathryn Matayoshi has said she isn’t convinced that Hawaii’s 4,000 acres of school lands were "substantial enough to generate any substantial revenue."

Moore says the sweeping nature of the legislation strikes him as extreme and "more convoluted than it needs to be.

"You have all these schools and all these ownership issues … personally, I think the counties have a legitimate complaint," he says. "If you just created enabling legislation for the (DOE) to do these kinds of things, then we could deal with them on a case-by-case basis. It’s just less threatening that way."

Among those endorsing the bills are the Hawaii State Teachers Association, Hawaii Government Employees Association, the Land Use Research Foundation of Hawaii, the Good Beginnings Alliance and the Hawaii 3R’s Program.

Tokuda says legislators are "just trying to be very creative by using existing resources to fund repair and maintenance of public schools."

She says the billls are "a work in progress" and may not be "a one-session effort as well."

"My initial thought (when reading the proposal for the legislation) was, ‘This is huge,’ " she says. "But times like this call upon us to be bold. We have to look at different vehicles, change the way we look at things and focus the discussion on what’s possible."

Tokuda says a public school land trust could be a boon for both state and counties.

"As long as the land is being used for school purposes, the counties get zero (income)," she says. "But if we look at multiple use — retail or commercial of some type — they’ll get real property tax revenues at the very least.

"Right now, any school land that isn’t being used reverts to the city. And so you have Wailupe (Elementary) sitting vacant and idle for 18 months now (after being closed). Could enabling legislation have created a different outcome? I don’t know. But we don’t have a lot of resources at our disposal, so we have to consider them all."

Says Tamayo: "The sense that there is a ‘win’ for the city because of increased real property tax revenue misses the mark. The loss of park space, much of it irreplaceable, cannot be balanced against the increase in tax revenue. Even if lands can be found to replace some parks, the cost of developing these lands into parks will far exceed any increase in revenue to the city generated by the new (land trust) development."

As for Wailupe Elementary, Tamayo says the city Parks Department Administration for District 3 is using the school as temporary headquarters while its current offices are being renovated, and that the Royal Hawaiian Band is considering using the library building as a rehearsal hall.