Fact or Fiction?

The legislature’s intent is to ONLY tax homes worth $1 million or more.

FICTION.
The Facts: The proposed amendment would allow the legislature to establish a new tax on all “investment real property” – residential, commercial and agricultural – regardless of their value. There is NOTHING that indicates the legislature’s intent is to only tax homes worth $1 million or more. In fact, the legislature removed specific language from the ballot question that would have limited the tax to “residential investment property valued at one million dollars or greater, excluding a homeowner’s primary residence.”

This new tax only affects rich, out-of-state investors.

FICTION.
The Facts: As it stands, this new tax would affect all property owners regardless of where they live and what their property is worth.

This new tax will help our keiki and public school classrooms.

FICTION.
The Facts: There is no guarantee of additional money for public education or that the money raised from this new tax will go to K-12 public school classrooms. The legislature could use the new funds to replace a portion of the nearly $2 billion in General Funds that currently goes to education and divert it to other priorities. In addition, the language of the bill indicates the money could go toward “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.”

Money raised from this new tax will go toward raises for Hawaiʻi’s teachers.

FICTION.
The Facts: The bill does not guarantee money from this tax will go toward raises for teachers. As it stands, this new tax could actually hurt teachers who live in rented homes and make it even more difficult to afford to live in Hawai‘i. It is critical to remember, when taxes go up, so does rent.

No one wants to tax “mom and pop” establishments under this new tax.

FICTION.
The Facts: Corey Rosenlee, president of the Hawaii State Teachers Association, was quoted
making this claim in an article in the Hawaiʻi Tribune-Herald, but the truth is, because there is no clear definition of “investment real property” in the proposed constitutional amendment, small businesses that rent could be affected by this new tax.

Hawaiʻi is the only state in the country that does not use property taxes to fund schools.

FACT.
The Facts: Hawai‘i is the only state in the country that has a single, statewide education system which is funded at the state level and not by local counties. The Hawaii Department of Education, which is funded primarily through the state’s General Fund, has an annual budget of $2 billion. These education funds are generated by state taxes and fees, including personal income tax, general excise tax, corporation tax and countless others. Added all up, Hawaiʻi has the second highest overall tax burden in the country, the highest sales and excise tax burden out of all 50 states and ranks in the top 10 for states with the highest personal income tax.

All of the counties oppose the ballot measure.

FACT.
The Facts: It’s true. The Hawaiʻi state constitution gives the counties exclusive authority to tax real property. It is a critical source of revenue to pay for core services like police, fire, street repairs, garbage pickup and park maintenance. Giving the state authority to tax real property would undermine and interfere with this authority and will make it even more difficult for county officials to balance their budgets and will hurt the counties’ bond ratings, which means borrowing costs will go up.

Hawaiʻi public schools are chronically underfunded.

FICTION.
The Facts: According to the Education Week Research Center’s 2018 Quality Counts survey, Hawaiʻi spends $13,436 per pupil, which is higher than the national average of $12,526 per pupil.

This new tax is about making the 1% pay their share to help our keiki.

FICTION.
The Facts: This new tax will raise the cost of living for 100% of Hawaiʻi residents by increasing the cost of residential rents and increasing the cost of goods and services. All of the language that guaranteed the money would help our keiki was taken out of the bill before it passed.