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  • Ryan O.

The Biggest Question We Are Facing

If you are a Hawaii state resident, you will see the following proposed amendment to the ARTICLES VIII and X of the State's Constitution on November's ballot:

"Shall the Legislature be authorized to establish, as provided by law, a surcharge on investment real property to be used to support public education?"

I think it's safe to say that most people care about our public school system, our teachers, and the future of our keiki. However, there are some concerns with regard to the wording of this question.

Let's look at the term, "investment real property." As defined, an "investment real property" can be a residential home, an apartment building, an office (building), agricultural land, or even a nursing home. With that being said, if the cost of ownership for a real estate investor is raised, they may pass that addition cost to the consumer? For example, a landlord could increase his/her tenant's rent to compensate. The same may happen if the investor owns a shopping center where addition cost is pass on to the tenants who in turn may pass their cost off to the consumer by charging more for a product.

Another term that has drawn further concern is, "surcharge." There is no metric for what the surcharge will be, i.e., will the surcharge only apply to properties with a value "x"? Is there a cap on the surcharge? More so, does the surcharge apply to non-resident owners? The wording for this question doesn't clarify these unknowns.

Here are additional things to consider when contemplating this question: if the ConAm passes, will the surcharge increase our teachers' salaries, help place air conditioning units in all of our classrooms, and wow will the surcharge be used? According to Tom Yamachika, president of Tax Foundation of Hawaii, there is no guarantee that this bill will actually increase the budget for our public schools.

It'll be interesting to see what happens in November as a result of this ConAm question.


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