Bill Text: HI HB1537 | 2024 | Regular Session | Amended
Bill Title: Proposing Amendments To Articles Viii And X Of The Constitution Of The State Of Hawaii To Authorize The Legislature To Establish A Surcharge On Residential Investment Property To Increase Funding For Public Education.
Spectrum: Partisan Bill (Democrat 9-0)
Status: (Introduced - Dead) 2024-02-14 - Report adopted. referred to the committee(s) on FIN as amended in HD 2 with Representative(s) Matsumoto voting aye with reservations; Representative(s) Alcos, Garcia, Kong, Pierick, Ward voting no (5) and Representative(s) Matayoshi, Takayama, Todd excused (3). [HB1537 Detail]
Download: Hawaii-2024-HB1537-Amended.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1537 |
THIRTY-SECOND LEGISLATURE, 2024 |
H.D. 2 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
PROPOSING AMENDMENTS TO ARTICLES VIII AND X OF THE CONSTITUTION OF THE STATE OF HAWAII TO AUTHORIZE THE LEGISLATURE TO ESTABLISH A SURCHARGE ON RESIDENTIAL INVESTMENT PROPERTY TO INCREASE FUNDING FOR PUBLIC EDUCATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION
1. The
legislature finds that article X, section 1, of the
Constitution of the State of Hawaii requires the State to provide a system of
public education, which includes K-12 and post-secondary education
institutions. Compared to other states,
Hawaii is unique because the State is responsible for providing and funding
public education and has only one public higher education system in the
State. As a result, funding for public
education in Hawaii is primarily sourced from the general revenues of the
State.
The legislature further finds that public
education in Hawaii is not adequately funded. According to a 2017 analysis of real property
tax in Hawaii performed by the department of business, economic development,
and tourism, Hawaii's education expenditures, as a share of combined state and
local government expenditures, is 27.3 per cent and ranks as the lowest in the
nation. At $12,855 per child, Hawaii
trails mainland school districts of similar size when adjusting for cost of
living. This inadequate funding of
Hawaii's public school system has played a role in driving many Hawaii families
to enroll their children in private schools, leaving Hawaii with one of the
highest rates of private school enrollment in the nation according to the
United States Census Bureau.
The legislature additionally finds that the United States Department of
Education currently considers over seventy per cent of Hawaii's public schools
to be Title I schools. In addition, a
majority of public school students are now considered high-needs students,
meaning they are students who qualify for free or reduced price lunch, English
language learners, or special education students.
The legislature also finds that funding of
public higher education in the State has declined as a portion of the state
budget from nine per cent in 2013 to seven per cent in 2022. During the same period, the cost of higher
education has increased nationally. The
2022 Hawaii Databook reports that the number of faculty, staff, and personnel
at the university of Hawaii has declined from 2019 to 2022. Reductions in funding and available state
revenue have compromised the sustainability and availability of programs at the
State's only public higher education institutions. With the costs of a college education rising,
the legislature further finds that access to, and affordability of, public
universities is even more critical for Hawaii residents. The university of Hawaii facilities are aged,
lack current investment, and are not contemporary to other universities due to
inadequate funding investment. While
statewide need for higher education and enrollment are ever increasing, the
lack of historical public funding support undermines the State's ability to
meet this demand.
The legislature further finds that Hawaii's
K-12 school and university facilities are aging, and funding for the repair and
maintenance of older facilities and building of newer facilities is sorely
needed. The mean age of K-12 school
facilities in Hawaii is sixty-one years; the average school building is
forty-four years old; and fifty-three buildings are over one hundred years
old. The majority of buildings at the university
of Hawaii were constructed over forty years ago. Classroom facilities, student housing
buildings, campus amenities, and facilities that support the physical plant of
the campus have not been adequately funded to the level to support regular
routine maintenance.
The legislature additionally finds that
after adjusting for the high cost of living in Hawaii, teachers' average salaries are in the lower
half of pay compared to other states in the United States. State
spending on public education is the lowest in the nation and is ranked as the
forty-ninth worst state in the nation for teachers.
The legislature further finds that the
COVID-19 pandemic brought unprecedented challenges that had a disproportionate effect on students of color and
students from low-income backgrounds.
The federal government was able to inject funds through the American Rescue
Plan and highlighted the importance of increased funds for public education in
the State.
The legislature also finds that chronic
underfunding in public education undermines the State's goal of providing
a quality education to all of Hawaii's students and to having an educated
workforce. Insufficient funding results
in delayed repairs to school facilities, overheated classrooms, larger class sizes, a lack of adequate classroom supplies,
elimination of arts and career and technical education courses, budget cuts for
special education and English language learner programs, increased in-state
tuition costs to attend the university of Hawaii, and an increasing number of
vacant teacher positions statewide. It
is necessary to develop a new means of funding Hawaii's public education system
to ensure that the State will be able to prepare all students to meet the
social and economic demands of the twenty-first century.
The legislature notes that the cost of
housing is a significant deterrent to affordability of residing in Hawaii. Real estate owned by nonresident investors
exacerbates the economics of unaffordability of housing. The State needs its residents to be educated
and for local businesses and the industry to have a well-educated resident
workforce. Enabling funding from real
estate speculation to support public education infrastructure within the State
is rational.
The purpose of this Act is to propose an
amendment to the Constitution of the State of Hawaii to repeal the counties exclusive power to
tax real property and authorize
the legislature to establish a state surcharge on real property taxation levied
by the counties on certain residential investment properties for the purpose of
helping to fund public education for all of Hawaii's children and adults.
SECTION 2. Article VIII, section 3, of the Constitution of the State of Hawaii is amended to read as follows:
"TAXATION
AND FINANCE
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]; provided
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 further that the legislature may
establish a surcharge on the counties' taxation of residential investment
property as provided in Article X, section 1. The legislature shall have the power to
apportion state revenues among the several political subdivisions."
SECTION 3. Article X, section 1, of the Constitution of the State of Hawaii is amended to read as follows:
"PUBLIC EDUCATION
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]; provided 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 and nonsectarian elementary schools, secondary schools,
colleges and universities.
The legislature may
by law establish a surcharge on real property taxation levied by the counties
on residential investment property valued at three million dollars or more to help fund public education for all of Hawaii's
children and adults.
For the purposes of
this section:
"Residential
investment property" means all real property including apartments and
condominiums and appurtenances thereto, including buildings, structures, fences
and improvements erected on or affixed to the real property, and any fixture
that is erected on or affixed to the land, buildings, structures, fences and
improvements; and all machinery and other mechanical or other allied equipment,
and the foundations thereof, that are dedicated for residential use and that do
not serve as the owner's primary residence; provided that the surcharge shall
not apply to any affordable housing development that is subject to a regulatory
agreement with the State or a county."
SECTION 4. The question to be printed on the ballot shall be as follows:
"Shall the Hawaii State Constitution be amended to:
(1) Repeal the counties' exclusive authority to exercise functions, powers, and duties relating to the taxation of real property; and
(2) Authorize the legislature to establish, through the enactment of legislation, a state surcharge on real property taxation levied by the counties on residential investment properties valued at three million dollars ($3,000,000) or more, exempting from the surcharge any property that serves as an owner's primary residence, for the purpose of helping to fund public education for all of Hawaii's children and adults?"
SECTION 5. Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.
SECTION 6. This amendment shall take effect on July 1, 3000; provided that this amendment shall take effect upon compliance with article XVII, section 3, of the Constitution of the State of Hawaii.
Report Title:
Constitutional Amendment; Public Education; Residential Investment Property Surcharge
Description:
Proposes amendments to the Hawaii State Constitution to repeal the counties exclusive power to tax real property and authorize the Legislature to establish a state surcharge on real property taxation levied by the counties on certain residential investment properties for the purpose of helping to fund public education for all of Hawaii's children and adults. Effective 7/1/3000. (HD2)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.