If there was one shared sentiment Monday following the Hawaii Supreme Court’s Friday decision to invalidate a proposed constitutional amendment to impose a state tax on investment property for public education, it was disappointment.

Disappointment from the measure’s main backer, the Hawaii State Teachers Association. Disappointment from state officials, including the governor, who had voiced support for letting people vote on the question. And even disappointment from some of the ConAm’s most vocal opponents in the business community.

“There was a short sigh of relief,” Colbert Matsumoto, chairman of Island Holdings, said Monday of the ruling, “but I was also disappointed.”
He said he wished voters had the chance to weigh in on a “divisive” measure that he said would have harmed renters and other residents.

In the immediate aftermath of the high court’s decision to strike down the so-called ConAm for not being clear enough in its wording and intent, supporters and opponents expressed a desire to move beyond the fractious debate and collaborate to find common ground on education spending.

A lingering point of dispute is whether the Hawaii Department of Education requires additional funding or simply needs to more efficiently manage its existing $2 billion annual budget, mostly comprised of state general funds. 

The ConAm proposed amending the state constitution to allow the Legislature to impose a tax of an undetermined amount on certain investment property to help fund public education. While HSTA argued only nonowner-occupied investment property worth $1 million or more would be impacted, opponents pushed back that any kind of property could potentially be taxed, pushing costs onto everyday residents.

Hawaii’s four counties, which led the legal challenge, have the sole authority to tax property. Their emergency petition to the Hawaii Supreme Court to strike down the ballot measure was based on the argument it wasn’t clear to the average voter that the proposed “surcharge” was actually a “tax” or which investment properties would actually be impacted. They also said giving the state a new taxing authority would harm their bond ratings to fund their own operations. 

The court — which has not yet issued a written opinion explaining its rationale — ordered the Hawaii Office of Elections to issue a proclamation declaring all votes on the ConAm void. Mail-in ballots have already arrived in many homes for the Nov. 6 election.
It’s not clear whether the HSTA, which led a two-year effort to get the ConAm on the ballot, will continue to pursue this vehicle to boost spending for public schools.

Link to full article: Honolulu Civil Beat: With ConAm Invalidated, Supporters and Opponents Ponder Next Moves