Tax Hike on Ballot: Point by Point Debunk of HSTA Lies
PBN: …The Hawaii State Teachers Association tried this last year and failed; this year they succeeded. But their rationalizations aren’t any smarter. It boils down to raw envy.
“Many wealthy people are using these properties to pad their own wealth,” said HSTA President Corey Rosenlee in a statement. “If these rich out-of-state investors can afford multimillion-dollar properties, they can afford to pay taxes to help educate Hawaii’s children. No one is going after the average homeowner. We’re really going after the speculators and the corporations that are buying up so much property that it’s driving up the cost of living that people can’t afford to live in Hawaii.”
Rosenlee is either misinformed, or misinforming us deliberately. Hawaii’s housing shortage, and corresponding astronomical median home price, has far more to do with our own local anti-growth, anti-development policies than anything outside money is capable of doing.
The case for this bill was made with several other dubious assertions:
That public education is Hawaii is underfunded. Is it? In fact, Hawaii’s per-pupil funding is 17th highest in the nation, as of 2015, according to U.S. Census data compiled by the public policy website, governing.com. The state’s education budget was $2.36 billion that year, per-pupil spending was $12,855.
The national average was $11,392. It’s nice to know there’s some measure by which the DOE is above average, because it certainly isn’t when it comes to student outcomes.
But that’s peanuts when adjusted for Hawaii’s cost of living, argues HSTA, which exposes something true but unsaid by the union — none of this is about spending more money on students, or on education. It’s about spending money on teachers. That’s the only arena in which Hawaii’s cost of living has any relevance. Unless HSTA is planning on unleashing previously unseen levels of performance after it gets the money, the public will be left with schools no more effective than before, only more expensive.
Revenue and spending on the schools has actually been increasing, according to an independent audit of the DOE by N&K CPAs Inc., for the state auditor, even without a special tax. Revenues increased 12 percent from fiscal year 2015 to 2016, to $3.098 billion. In FY 2015, $2.393 was spent on school-related activities, in 2016 it was $2.498 billion.
For historical perspective, in 1998, according to the State Data Book, public school spending was $1.64 billion. In today’s dollars, that’s $2.46 billion, nearly exactly where we’re at now. Enrollment in ’98 was 188,069 students, as of the 2014-2015 school year, it’s down to 180,895. I have a hard time buying the argument that there’s some urgent, now-more-than-ever funding crisis.
That public education has no dedicated revenue stream. Gosh, no, aside from the enormous taxation powers of state government itself! Look at what the state takes out of your paycheck every two weeks. That, right there, is the dedicated revenue stream for public education, which is the single largest activity of state government….
read … Written exam in November on school tax
* * * * *
HSTA Slush Fund Unlimited Tax Increases in Your Future
CB: …Should the proposal for a constitutional amendment pass, lawmakers would still need to figure out details of how high any surcharge might be, which investment properties to target and which components of public education could be the main beneficiaries of the revenue.
Because the final wording of the ballot question is so vague, there is no dollar figure on how much the surcharge could generate or specifics on how this tax structure could work….
Opponents, however, believe this type of tax creates a potentially risky scenario that will siphon much-needed revenue away from counties, which currently exercise control over property tax revenue, and lead to a trickle-down effect that will expand other taxes and stick renters with higher costs.
The Senate passed the measure by a 23-1 vote. Senate Bill 2922 was introduced in the Senate, got sent to the House, where it was amended, and was returned to the Senate for final consideration.
The lone dissenter was Sen. Gil Riviere, of Waialua, who argued that although the proposed tax on residential investment property is meant to target the wealthy, it will lead to negative repercussions on “regular people” who rent.
City and county officials are also in opposition.
Honolulu Mayor Kirk Caldwell’s administration said such a tax will have an “adverse impact” on Honolulu’s real estate market since it might dissuade potential investors from investing in higher-priced properties, driving rents up higher overall.
Harry Kim, the mayor of Hawaii County, wrote in testimony that the county relies “overwhelmingly on real property taxes to fund our operations” and that a surcharge on residential investment properties would make it more difficult to balance his budget….
read … Voters Will Decide Whether To Hike Property Taxes To Fund Schools
* * * * *
Amendment for education would raid county coffers
Shapiro: …its vague language doesn’t guarantee all funds would go to education, lawmakers fail to weigh other priorities for limited tax dollars, and they constrain the counties’ ability to use the property tax — their main funding source — for their own needs.
The amendment was pushed by the Hawaii State Teachers Association, which originally sought to fund it through the state’s excise or hotel room tax.
It didn’t gain traction until lawmakers glommed onto the idea using the property tax, enabling them to win favor with the powerful teachers union while putting the fiscal pain on the counties.
The union’s main interest is raising money for bigger teacher pay raises. Pressing issues for the kids, such as dilapidated facilities, wouldn’t necessarily receive priority for new funding.
The proposed amendment doesn’t say how much would be raised, which properties would be taxed or exactly how the funds would be used.
It would simply allow a future Legislature to enact “a surcharge on investment real property to be used to support public education.”
While lawmakers say the tax is aimed at outside investors, the language doesn’t guarantee local homeowners or renters wouldn’t end up bearing the weight. Nor does it guarantee legislators wouldn’t use the new money as a cover to reduce existing general funds for education.
This tax hasn’t been discussed in the context of overall state and county needs.
Each dollar it siphons from a limited tax base is a dollar unavailable for homelessness, public worker pension and health care deficits, and infrastructure threatened by decay and rising sea levels — all of which will take billions to solve.
The property tax until now has been a constitutionally protected county tax, vital to local government services, and opening it to the state’s sticky fingers creates uncertainties that could hamstring county finances….
read … Amendment for education would raid county coffers
* * * * *
CONSTITUTIONAL AMENDMENT TO BETTER FUND SCHOOLS APPROVED BY LAWMAKERS; WILL BE ON THE NOVEMBER BALLOT
News Release from HSTA, April 23, 2018
The State Senate today approved a bill to ask voters to decide this fall whether the state should be empowered to impose a surcharge on residential investment properties to help fund public education.
The Senate’s 23 to one vote in favor of the Constitutional Amendment proposal comes after members of the State House unanimously approved the bill April 10.
“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,” said Corey Rosenlee, president of the Hawaii State Teachers Association. “We need to reinvest in our public schools to make Hawaii more competitive in attracting good paying jobs and ensuring that our keiki have the skills they need to compete in the worldwide economy.”
“The intent of both the State Senate and House has been that this surcharge would not apply to owner-occupants but instead is aimed at investment properties worth $1 million or more,” Rosenlee added. “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.”
As a result of lawmakers’ votes, the measure for a Constitutional Amendment will automatically be on the ballot for Hawaii voters to decide in the general election on Nov. 6. If a majority of voters approves the amendment, next year’s Legislature will set up the details of how the surcharge will be implemented, including any exemptions lawmakers may want to add.
Rosenlee thanked the 50 state representatives and 23 senators who voted to send the proposal to the ballot box, singling out Senate Education Chair Michelle Kidani and House Education Chair Justin Woodson, who shepherded the proposal through their committees, working diligently and collaboratively to bring it to votes in both houses.
“Leaders of the House and Senate made it clear that they do not intend to create a surcharge that would affect the average Hawaii resident, since owner-occupants would be exempt and even those who own second or third homes or condos would not be affected as long as each property is valued under $1 million,” said Rosenlee. “No one is going after the average homeowner. We’re really going after the speculators and the corporations that are buying up so much property that it’s driving up the cost of living that people can’t afford to live in Hawaii.”
Hawaii is the only state in the country that does not use some portion of property taxes to fund its schools, which results in the 50th State spending the lowest percentage of both state and local revenue toward education in the entire nation.
“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,” Rosenlee said. “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.”
About the Hawaii State Teachers Association: The Hawaii State Teachers Association is the exclusive representative of 13,700 public school teachers statewide. As the state affiliate of the 3-million member National Education Association, HSTA represents and supports teachers in collective bargaining, as well as with legislative and professional development issues.
Senate News Release: SENATE PASSES CONSTITUTIONAL AMENDMENT TO SUPPORT PUBLIC SCHOOLS.