City sues to block ballot proposal that would raise taxes to better fund schools

HONOLULU (HawaiiNewsNow) - The city wants to strike down a constitutional amendment proposal that would raise taxes on investment properties to help pay for Hawaii's under-funded schools.

In an amended lawsuit filed Wednesday, the city said the ballot question usurps its authority to set and collect real property taxes. It also says the wording is so vague that it would allow state lawmakers to raise this tax as much as they want.

"There aren't any parameters on this constitutional amendment. So the taxation power that the Legislature hopes to give to itself, it knows no bounds. There's no dollar amount limitation," said Honolulu City Corporation Counsel Donna Leong.

"We're very concerned about the collateral affect on the county's real property taxation efforts."

But Corey Rosenlee, president of the teacher's union, said the schools need the money.

"Right now, Hawaii teachers are the lowest paid in the nation," said Rosenlee, who is spearheading the proposal.

"Hawaii schools are the only ones in the country that don't use real property taxes to fund their schools. What we're looking at specifically is to tax second homes over $1 million."

Rosenlee said Hawaii's low property tax rate encourages offshore investors to buy up Hawaii properties, driving up Hawaii's cost of living.

"Trump Towers was able to sell out $700 million worth of property in one a day. If these people can afford $700 million in property, they can find a way to fund our schools," he said.

Along with the city, businesses are also lining up against the constitutional amendment. They say it's written so vaguely that it would allow the state Legislature to also increase taxes on commercial properties.

The head of the Chamber of Commerce of Hawaii said that could further increase the cost of living here.

"Commercial leases, those will go up. Small businesses will be impacted by that. Their leases go up, the cost of goods go up," chamber CEO Sherry Menor-McNamara said, during a recent PBS Insights show.

The ballots containing the constitutional amendment proposal will be printed Sept. 7. The city is hoping the courts will step in before then.

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