Hawaii Surcharge on Investment Properties to Fund Public Education Amendment (2018)

Elections in Hawaii, 2018

• General election: Nov. 6
• Voter registration deadline: Oct. 9
• Early voting: Oct. 23 - Nov. 3
• Absentee voting deadline: Nov. 6

• Online registration: Yes
• Same-day registration: Yes
• Voter ID: Non-photo ID
• Poll times: 7:00 a.m. to 6:00 p.m.

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Hawaii Constitutional Amendment
Election date November 6, 2018
Topic Taxes and Property
Status Not on the ballot
Type Constitutional amendment	Origin State legislature
List of Hawaii measuresHawaii Constitutional Convention QuestionSubmit

The Hawaii Surcharge on Investment Properties to Fund Public Education Amendment (State Bill 2922) appeared on the ballot in Hawaii as a legislatively referred constitutional amendment on November 6, 2018. The Hawaii Supreme Court, however, ruled that the measure was invalid and ordered elections officials not to count any votes cast on the measure. Though votes cast on the measure were invalid, election results show that the measure would have nonetheless been rejected by voters. A total of 60 percent of voters voted no, 14 percent cast blank ballots on the question, and 26 percent voted yes.

Overview

Measure design

The Hawaii Surcharge on Investment Properties to Fund Public Education Amendment, Senate Bill 2922, would have authorized the Hawaii Legislature to establish a surcharge on investment properties, with revenue to be used to fund public education. According to Sen. Michelle Kidani, who introduced the bill on behalf of the Hawaii State Teacher Association, the surcharge was to be applied to residential properties valued at over $1 million. However, the state House approved an amended version of SB 2922, removing language regarding the value of investment properties. Instead, the amendment would have allowed the state legislature to determine the surcharge's amount and to what properties the surcharge would have been applied.

Public education funding in Hawaii

According to the 2017 U.S. Census report on Public Education Finances in 2015, Hawaii was ranked 17th in the nation for per-pupil spending. For fiscal year 2018, the Department of Education had a budget of $1.983 billion, with $1.61 billion coming from the state's General Fund. The operating budget of the Hawaii State Department of Education for fiscal year 2018 was composed 81 percent of state funds, with federal funds, special funds, and trust funds making up the other 19 percent.

State of ballot measure campaigns

One committee was registered to support this initiative: HSTA for Schools Our Keiki Deserve. The committee reported $887,789 in contributions and $566,611 in expenditures. The top three donors to the committee were the Hawaii State Teachers Association ($516,869), the National Education Association ($343,853), and Hamburger Strategies ($27,018) which provided 99.99 percent of the contributions to the committee.

One committee was registered to oppose the measure: Affordable Hawaii Coalition PAC. The Affordable Hawaii Coalition PAC reported $1.23 million in contributions and $726,081 in expenditures. The largest donors were the Hawaii Chamber of Commerce ($600,000) the National Association of Realtors ($200,000). The National Association of Realtors and the Retail Merchants of Hawaii filed as committees opposing the measure, but Ballotpedia tracked them as contributors to the Affordable Hawaii Coalition PAC since all of their funds were expended to the PAC.

Text of measure

Ballot question

The ballot question was as follows:

“

Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?

”

Constitutional changes

See also: Article VIII and Article X of the Hawaii Constitution

The measure would have amended Section 3 of Article VIII and Section 1 of Article X of the Hawaii Constitution. The following underlined text would have been added and struck-through text would have been deleted:

Note: Use your mouse to scroll over the below text to see the full text.

Section 3 of Article VIII Section 3. The taxing power shall be reserved to the State, except so much thereof as may be delegated by the legislature to the political subdivisions, and except that all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties, with the exception of the county of Kalawao.; provided that the legislature may establish, as provided by law, a surcharge on investment real property. The legislature shall have the power to apportion state revenues among the several political subdivisions. Section 1 of Article X Section 1. The State shall provide for the establishment, support and control of a statewide system of public schools free from sectarian control, a state university, public libraries and such other educational institutions as may be deemed desirable, including physical facilities therefor. There shall be no discrimination in public educational institutions because of race, religion, sex or ancestry; nor shall public funds be appropriated for the support or benefit of any sectarian or nonsectarian private educational institution, except that proceeds of special purpose revenue bonds authorized or issued under section 12 of Article VII may be appropriated to finance or assist: 1. Not-for-profit corporations that provide early childhood education and care facilities serving the general public; and 2. Not-for-profit private nonsectarian and sectarian elementary schools, secondary schools, colleges and universities. Funding of public education shall be determined by the legislature; provided that revenues derived from a surcharge on investment real property pursuant to section 3 of article VIII shall be used to support public education.

Readability score

See also: Ballot measure readability scores, 2018

Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The state legislature wrote the ballot language for this measure. The FKGL for the ballot title is grade level 15, and the FRE is 31. The word count for the ballot title is 24, and the estimated reading time is 6 seconds. In 2018, for the 167 statewide measures on the ballot, the average ballot title or question was written at a level appropriate for those with between 19 and 20 years of U.S. formal education (graduate school-level of education), according to the FKGL formula. Read Ballotpedia's entire 2018 ballot language readability report here.

Support

HSTA for Schools Our Keiki Deserve led the campaign in support of this measure.

Supporters

• Sen. Michelle Kidani (D)
• Hawaii State Teachers Association (HSTA)
• Hawaii Teachers Standards Board
• Hawaii Appleseed Center for Law & Economic Justice
• Hawaii Alliance for Progressive Action

Arguments

• According to the Hawaii State Teachers Association, Hawaii is the only state in the United States that does not use property taxes to fund education, resulting in Hawaii spending the "lowest percentage of both state and local revenue toward education in the entire nation."

• Corey Rosenlee, president of the Hawaii State Teachers Association, said, "Every year we say education is a priority, but we don't do enough to improve chronic underfunding of public education while Hawaii's children are falling behind and schools struggle to prepare students for 21st-century jobs. Trump Towers was able to quickly sell out more than 400 units, with some condos selling for more than $10 million. Many wealthy people are using these properties to pad their own wealth. If these rich out-of-state investors can afford multi-million dollar properties, they can afford to pay taxes to help educate Hawaii's children." Rosenlee also said: "Hawaii teachers have the lowest pay in the country, when our Hawaii cost of living is factored in, resulting in constant turnover and more than 1,000 teacher vacancies each school year. That means thousands of students are regularly taught by uncertified and unqualified long-term substitutes, some of whom lack a college degree. If we want to attract and keep quality teachers, we need to invest in our schools to give our educators and our students the resources to excel.”

• Anne Frederick, executive director for the Hawaii Alliance for Progressive Action, said, "Our children are our future. When teachers instruct their students, we build the foundation for equality and prosperity for tomorrow’s generations. Every dollar invested in our community’s public schools yields exponential returns, not just for our economy, but for the promise of a more open and democratic society.”

• Sen. Michelle Kidani (D) of Oahu, who introduced the bill on behalf of the Hawaii State Teachers Association, said, “The public should be assured that the Senate has no intention of taxing the homes you live in, that is homes for which resident owners receive a homeowner’s exemption. Nor does the Senate intend to approve any surcharge on investment properties valued less than $1 million. Further, no consideration has ever been given to a surcharge on commercial properties. The intent is and always has been to focus on residential properties."

• Alan Isbell, a teacher at Wailuku Elementary School and president of the Hawaii State Teachers Association Maui Chapter wrote:

“

Why did underfunding public schools continue? Because they who wrote Hawaii’s Constitution put public school funding in the General Fund, where it would be subject to the whims and vagaries that occur depending on the direction the political pendulum is swinging. Only in Hawaii are public schools so serendipitously funded. The rest of the nation’s public education is paid for through separate funds designated for it. Property taxes are almost always the source of that funding. The rationale of those at that original Con Con was that the state would raise revenues through income taxes, general excise taxes and the like, and reserve property taxation for the counties. What has been the result? The lowest teacher salaries in the nation when adjusted for cost of living, and the lowest per capita funding of schools in general. Consequently, teacher shortages are chronic, and many of the buildings that shelter our students remain dilapidated. The decision to limit property taxation to the counties was Con Con’s biggest mistake. Our rate of property taxation is the lowest in the country. That would be commendable if not for nonresident property investors seeing profits to be made.

”

Opposition

The Affordable Hawaii Coalition PAC led the campaign in opposition to the measure.

Arguments

• Editor-in-Chief of Pacific Business News, A. Kam Napier, said, "The Legislature, as our representatives, should’ve explained all this to the HSTA and declined to kick this can down the road to us. But they didn’t. Now it’s our call. The question you have to ask yourself is, given what you’ve seen of local government excellence and accountability so far, how comfortable are you with writing it another blank check?"

• President of the Tax Foundation of Hawaii, Tom Yamachika, said that the proposed amendment has “no guarantees at all. That’s something that I think people should know.” Yamachika wrote:

“

The amendment, if approved by the voters, does not define what investment real property is. Nor does it contain any limitations on the taxing power. Almost all the details are left up to the state legislature. For constitutional provisions, this is not uncommon, but if approved it would give the genie, namely the legislature, a lot more power over revenue raising than it previously had. ... And even if that $500 million is raised, there are, sadly, no guarantees that any of it will end up in the classroom. About $2 billion in general fund monies are now appropriated to the Department of Education. If the real property surcharge pulls in hundreds of millions, there will be tremendous pressure on lawmakers to “repurpose” some of the $2 billion.

”

• Mike White, the chair of the Maui County Council, wrote:

“

As it relates to the taxing powers and duties of local government bodies, the Hawaii Constitution currently states, “the taxation of real property shall be exercised exclusively by the counties.” Maui County’s main source of income is from real property taxes, which accounts for more than 40 percent of its total revenue. Increasing real property taxes by adding a surcharge will burden many residents and make balancing the county’s budget in the future very difficult. The unintended consequence of adding a surcharge on real property tax lies in passing the burden to renters, who are part of the county’s workforce. As a result, the potential surcharge could further exacerbate the state’s affordable housing crisis.

”

Campaign advertisements

The following video was released by the Affordable Hawaii Coalition PAC:

Title: "No On ConAm"

Media editorials

See also: 2018 ballot measure media endorsements

Support

Ballotpedia did not identify any media editorials in support of the measure. If you are aware of one, please send an email with a link to editor@ballotpedia.org.

Opposition

• West Hawaii Today said: "No to education tax; but yes on local control... voters will decide whether they trust the state Legislature to put their money to good use. Because really that’s what the ballot question boils down to: Do you trust your lawmakers? But that’s not how the question is posed on the ballot. Far from it. It’s worded loosely enough to give the Legislature the authority to implement a new tax — nothing on exactly how much it will cost, whom it will hit, and what the revenues will go for, exactly. Yes, the conversation must go on and real change implemented. It may take more work to get there ... But if public education needs a major change — one thing on which both sides seem to agree is that it does — then it should be local control over a local budget. It beats handing Oahu a blank check with one hand while keeping fingers crossed with the other."

Polls

Below are the results of a poll that asked respondents how they would vote on this measure. Also displayed are the dates the poll was conducted, the number of respondents, and the poll's margin of error.

Hawaii Surcharge on Investment Properties to Fund Public Education Amendment
Poll	Yes- support	No- oppose	Won't vote on it	Not sure	Margin of error	Sample size
Civil Beat poll 10/8/18 - 10/12/18	35%	53%	5%	7%	+/-4.4	488
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Campaign finance

See also: Campaign finance requirements for Hawaii ballot measures

Total campaign contributions:
Support:	$837,789.43
Opposition:	$1,234,791.80

One committee was registered to support this initiative: HSTA for Schools Our Keiki Deserve. The committee reported $837,789 in contributions and $516,611 in expenditures. The top three donors to the committee were the Hawaii State Teachers Association ($516,869), the National Education Association ($343,853), and Hamburger Strategies ($27,018) which provided 99.99 percent of the contributions to the committee.

Note: To avoid double-counting funds, Ballotpedia subtracted $50,000 from the HSTA for Schools Our Keiki Deserve's contributions and expenditures because they gave $50,000 to Preserve our Hawaii, a PAC that opposed the Constitutional Convention question.

One committee was registered to oppose the measure: Affordable Hawaii Coalition PAC. The Affordable Hawaii Coalition PAC reported $1.23 million in contributions and $726,081 in expenditures. The largest donors were the Hawaii Chamber of Commerce ($600,000) the National Association of Realtors ($200,000). The National Association of Realtors and the Retail Merchants of Hawaii filed as committees opposing the measure, but Ballotpedia tracked them as contributors to the Affordable Hawaii Coalition PAC since all of their funds were expended to the PAC.

Support

Committees in support of Surcharge on Investment Properties to Fund Public Education Amendment Supporting committees Cash contributions In-kind services Cash expenditures HSTA for Schools Our Keiki Deserve $808,068.25 $29,721.18 $536,889.90 Total $808,068.25 $29,721.18 $536,889.90

Totals in support Total raised: $837,789.43 Total spent: $516,611.08

Top donors

Donor	Cash	In-kind	Total
Hawaii State Teachers Association	$501,000.00	$15,868.60	$516,868.60
National Education Association	$330,000.00	$13,852.58	$343,852.58
Hamburger Strategies	$27,018.25	$0.00	$27,018.25

Opposition

Committees in opposition to Surcharge on Investment Properties to Fund Public Education Amendment Opposing committees Cash contributions In-kind services Cash expenditures Affordable Hawaii Coalition PAC $1,234,491.80 $300.00 $725,780.56 Total $1,234,491.80 $300.00 $725,780.56

Totals in opposition Total raised: $1,234,791.80 Total spent: $726,080.56

Top donors

Donor	Cash	In-kind	Total
Hawaii Chamber of Commerce	$600,000.00	$0.00	$600,000.00
National Association of Realtors	$200,000.00	$0.00	$200,000.00
Park Hotels and Resorts	$50,000.00	$0.00	$50,000.00
Brookfield Properties	$50,000.00	$0.00	$50,000.00
Hawaii Carpenters Market Recovery Program Fund.	$25,000.00	$0.00	$25,000.00

Methodology

To read Ballotpedia's methodology for covering ballot measure campaign finance information, click here.

Background

According to the Hawaii State Department of Education, Hawaii is ranked 17th in the nation for per-pupil spending. For fiscal year 2018, the Department of Education had a budget of $1.983 billion, with $1.61 billion coming from the state's General Fund. The operating budget for fiscal year 2018 was composed 81% of state funds, with federal funds, special funds, and trust funds making up the other 19%.

Path to the ballot

See also: Amending the Hawaii Constitution

In Hawaii, a constitutional amendment can be placed on the ballot by a two-thirds (66.67%) vote vote in each chamber of the Hawaii State Legislature during one legislative session.

A group of seven legislators introduced the amendment into the state legislature as Senate Bill 2922 (SB 2922) on January 24, 2018. The amendment passed the state Senate on March 6, 2018. The original version of SB 2922 would have applied the surcharge to residential investment properties valued at $1 million or more. On April 10, 2018, the state House approved an amended version of SB 2922, removing language regarding the value of residential investment properties. Instead, the amendment would allow the state legislature to determine the surcharge's amount and what investment properties the surcharge would be applied to. SB 2922 received the unanimous approval of the state House.

On April 12, the state Senate issued a notice of disagreement with the state House's changes to the amendment. Senators formed a conference to discuss the amendment and the state House's changes. On April 18, 2018, the state Senate adopted a motion to concur with the state House's amendments. On April 23, 2018, the state Senate gave final approval to SB 2922, voting 23 to 1 with one member excused.

Vote in the Hawaii House of Representatives April 10, 2018
Requirement: Two-thirds (66.67 percent) vote in each chamber; or a simple majority vote in each chamber in two sessions
Number of yes votes required: 35  a
	Yes	No	Not voting
Total	51	0	0
Total percent	100.00%	0.00%	0.00%
Democrat	46	0	0
Republican	5	0	0

Vote in the Hawaii State Senate April 23, 2018
Requirement: Two-thirds (66.67 percent) vote in each chamber; or a simple majority vote in each chamber in two sessions
Number of yes votes required: 17  a
	Yes	No	Not voting
Total	23	1	1
Total percent	92.00%	4.00%	4.00%
Democrat	23	1	1
Republican	0	0	0

Lawsuit

City of Honolulu and Kauai, Hawaii, and Maui counties v. State Elections Officials

  

Lawsuit overview
Issue: Whether the ballot language is misleading, unclear, and deceptive
Court: Filed in Honolulu circuit court, appealed to Hawaii Supreme Court
Ruling: Supreme Court ruled in favor of plaintiffs, measure invalid and votes not to be counted
Plaintiff(s): The city of Honolulu and counties of Kauai, Hawaii, and Maui	Defendant(s): Hawaii state elections officials including Governor David Ige and Lieutenant Governor Doug Chin
Plaintiff argument: The amendment's ballot language is misleading, unclear, and deceptive. The ballot question and measure text do not clearly define investment real property and do not mention taxes or that the state legislature would have a new taxing power.	Defendant argument: Unknown

  Source: Honolulu Civil Beat

The City of Honolulu and the counties of Kauai, Hawaii, and Maui filed a lawsuit against state elections officials alleging that the amendment should be removed from the ballot because the text of the measure and the ballot title were misleading, unclear, and deceptive. Hawaii State Teachers Association President Corey Rosenlee said, "They should be ashamed of themselves. They are wasting taxpayers’ money by filing this frivolous lawsuit instead of finding a way to adequately fund Hawaii’s public schools.”

The ballot question for the amendment is as follows:

“

Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?

”

On September 7, 2018, Judge Jeff Crabtree denied the plaintiff's request for a preliminary injunction to block the amendment from the ballot. Donna Leong, counsel for the plaintiffs, said that the counties would continue the lawsuit while also working on the campaign opposing the amendment. Plaintiffs appealed the case to the Hawaii Supreme Court on September 26, 2018.

The state Supreme Court ruled on October 19, 2018, that the measure was invalid because the ballot language was not sufficiently clear. The court ordered elections officials not to count any votes cast on the measure.

How to cast a vote

See also: Voting in Hawaii

Poll times

As of 2019, Hawaii is an all-mail voting state, which means that its elections are conducted almost exclusively by mail. There are voter service centers open for ten business days prior to each election until 7:00 p.m. Hawaii Standard Time to receive personal delivery of mail-in ballots, accommodate voters with special needs, offer same-day registration and voting, and provide other election services.

Registration requirements

Check your voter registration status here.

To register to vote in Hawaii, one must be a United States citizen, a resident of the state, and at least 18 years old. Pre-registration is available beginning at age 16. The deadline to register to vote is 30 days before an election. Registration can be completed in the following ways:

“

Online: Visit olvr.hawaii.gov. You must have a current Hawaii Driver’s License or State ID to complete an application online. Mail: Print & submit a completed Voter Registration Application to your Clerk’s Office. In-person: Visit the Office of Elections or your Clerk’s Office to submit an application in person. Applications are available at any of the following locations: County Elections Divisions Clerk’s Offices State Libraries U.S. Post Offices Most State Agencies Satellite City Halls

”

Same day voter registration is available at voter service centers, to register and vote in-person, beginning 10 days prior and through election day. Once you are registered, you do not need to re-register for another election unless your residence address, mailing address, or name changes.Hawaii adopted same-day registration in 2014; implementation occurred in 2018.

Automatic registration

Hawaii does not practice automatic voter registration.

Online registration

See also: Online voter registration

Hawaii has implemented an online voter registration system. Residents can register to vote by visiting this website.

Same-day registration

Hawaii allows same-day voter registration.

Residency requirements

To register to vote in Hawaii, you must be a resident of the state. State law does not specify a length of time for which you must have been a resident to be eligible.

Verification of citizenship

See also: Laws permitting noncitizens to vote in the United States

Hawaii does not require proof of citizenship for voter registration.

Verifying your registration

Hawaii's Online Voter Registration System, run by the Hawaii Office of Elections, allows residents to check their voter registration status online.

Voter ID requirements

Voters in Hawaii are not generally required to present identification while voting. In 2019, the statute requiring voters to present identification if so requested by a precinct official was repealed.

When registering to vote for the first time, a Hawaii Driver License, Hawaii State ID, or the last 4-digits of the voter's Social Security Number is required. If none of these can be provided, one of the following must be provided as proof of identification:

• A current and valid photo identification; or
• A current utility bill, bank statement, government check, paycheck, or other government document that shows your name and address.

See also

2018 measures

• 2018 ballot measures
• Taxes on the ballot
• Property on the ballot
• Education on the ballot
• 2018 legislative sessions

Hawaii

• Hawaii ballot measures
• Hawaii ballot measure laws
• Public education in Hawaii

News and analysis

• Ballot measure lawsuits
• Ballot measure readability
• Ballot measure polls

External links

• Hawaii SB 2922