'Real estate speculation' surcharge proposed to benefit public education
Jan. 31—A measure that would have Hawaii voters decide on whether residential investment property valued at $3 million or more should be subject to a surcharge in order to increase funding for local public education passed out of the state House Education Committee on Tuesday.
Thirteen bills approved by the House committee with various amendments and referrals also include proposals to create a registry listing school workers found to have harmed students, provide more support for public-school employees harassed by parents or community members, and potentially give millions of dollars in emergency appropriations for public-school meals and the charter schools.
House Bill 1537 proposes amendments to the Hawaii Constitution meant to increase funding for Hawaii's statewide public-school system of 258 schools and 37 charter schools, and the 10-campus public University of Hawaii system, by authorizing the state Legislature to establish a surcharge on residential investment property valued at $3 million or greater.
A similar measure was passed by the Legislature in 2018 but later invalidated by the Hawaii Supreme Court. At that time the question printed on ballots was, "Shall the legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?" Ruling in favor of Hawaii's four counties, the court unanimously found that the wording of the question wasn't sufficiently clear.
The new proposal, introduced by nine state representatives, would add to the ballot, "Shall the legislature increase funding for public education for all of Hawaii's children and adults by establishing, as provided by law, a surcharge on residential investment property valued at $3,000,000 or greater, excluding a homeowner's primary residence?"
The affected properties would be those "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," the bill said.
"Enabling funding from real estate speculation to support public education infrastructure within the state is rational," the bill added.
Osa Tui Jr., president of the Hawaii State Teachers Association, said in his testimony supporting the measure that "increasingly Hawaii is becoming the playground for the mega wealthy. It's unconscionable that as they harvest the benefits and splendors of these lands and what they offer, they don't also give back to our schools, which are falling apart and not providing our keiki with the schools that they deserve."
Kalbert Young, UH vice president for budget and finance and chief financial officer, was among testifiers who said the surcharge is needed because Hawaii public education is getting a shrinking slice of the budget pie.
In fiscal year 2016, UH received $427.6 million, or 6.5% of the state general fund budget, but for fiscal year 2024, UH's $614.1 million equals 5.7% of the state general fund budget, Young said. "The same trend is also reflected with public K-12 (state) Department of Education declining from 23.2% to 19.8% over the same period," Young wrote.
Tom Yamachika, president of the nonprofit Tax Foundation of Hawaii, testified that the proposal has too many "loose ends," such as a lack of a time limit or rate structure.
Lyndsey Garcia, director of advocacy for the Hawai'i Association of Realtors, expressed concern that such a surcharge "will add to the cost of housing and rentals. There's a misconception that such taxation solely affects the wealthy or luxury properties. However, this also directly impacts workforce housing, including multi- family units and walk-ups in our state." The cost could be passed on to renters, "further adding to the financial burden of residents in our state already grappling with high costs of living and housing."
State Rep. Justin Woodson (D, Kahului-Puunene), chair of the House Education Committee, said the House Judiciary Committee also will be asked the review the measure. Its companion, Senate Bill 2056, has passed first reading but has not been scheduled for a further hearing.
Emergency funding
The separate measures to make "emergency appropriations" to the DOE for food services and for the charter schools suggest that those departments are struggling to cover higher costs.
House Bill 2042 in its initial form said the DOE had accumulated a deficit of $20 million in its food service operations, "largely due to inflationary cost increases." Before the vote, Woodson proposed to leave the proposed appropriation amount blank, with the $20 million mentioned in a committee report.
The department provides about 20,000 school breakfasts and 80,000 school lunches daily, the bill said.
House Bill 2403 says the growth rate for Hawaii public charter schools has been 4% higher than projected, due in part to a "growing need for temporary school options in Lahaina as a result of the destruction incurred by the devastating wildfires."
The bill in its initial form called for $6.6 million, but Woodson also proposed that the appropriation be left open for now, with the amount mentioned in a committee report.
Protecting students
Another measure passed by the House Education Committee would establish a "harm to students registry" for all Hawaii preschools and K-12 educa- tional institutions. It would contain information on school employees, contractors or volunteers for whom, "as result of an investigation, a final finding has been issued that the individual has inflicted harm on a student."
Hawaii's preschools and K-12 schools, House Bill 2043 said, have "increasingly served as safe havens for individuals who aim to exploit their positions at schools to carry out acts that harm children," such as abuse, assault and harassment. "The legislature further finds that all too often, based on real or perceived legal restrictions, schools fail to provide vital information to one another to consider in the rendering of their decisions. This lack of communication allows contact with students to these perpetrators and creates a revolving door for the perpetrators at preschools and K-12 schools in the state."
The goal is "preventing those individuals from subsequently gaining employment in any other public or private preschools and K-12 institution in Hawaii," the measure said.
Meanwhile, House Bill 1651 calls for the Hawaii DOE to take certain steps to "better address harassment of educational workers; and establish the offense of harassment of an educational worker." State schools Superintendent Keith Hayashi, the HSTA and numerous educators have told legislators that harassment of school employees, including physical threats and intimidation, has increased alarmingly in recent years.
