HONOLULU — Gov. David Ige lent his political weight Monday night to a proposed constitutional amendment that would allow the state to tax investment properties to support public education, while also promising to veto any resulting bill that might raise property taxes for owner-occupied homes or increase rents on affordable housing.
The governor also pledged to oppose using property taxes to replace general funds for education.
Ige’s statements during a KHON gubernatorial debate with his Republican opponent, state Rep. Andria Tupola, might help boost public support for the ballot measure, but it still faces stiff resistance from all four counties, a well-funded coalition of business interests and four former Hawaii governors. Tupola also opposes the measure.
The issue will ultimately be decided by voters in the Nov. 6 election.
“I support this amendment because we’ve seen year after year about the needs of our public education system that cannot be funded with the funds that we have,” Ige said. “You know, Hawaii is the only state in the country where zero dollars — not a single penny of property taxes — goes to our public schools.”
Most of the nation’s schools are funded by local property taxes. By contrast, Hawaii has a statewide public education system that is funded primarily by state general funds. The Hawaii State Teachers Association, the biggest backer of the ballot measure, has argued that past attempts to raise revenue for schools from other sources have failed. The union is advocating for a tax on second homes valued at more than $1 million to boost teachers’ salaries and better fund classrooms.
Hawaii has the lowest property tax rates in the country, and the union has argued this incentivizes outside investors to purchase homes, driving up the overall cost of housing for local residents.
The ballot measure has been met with an avalanche of criticism from county governments and a coalition of businesses called the Affordable Hawaii Coalition. The coalition has warned that giving the state the power to tax property, which currently only the counties have, would increase the cost of living in Hawaii, affecting businesses, property owners, renters, consumers and farmers. They’ve also warned that there is no guarantee that extra revenue would go to teachers’ salaries and classrooms.
Ige, who won the HSTA’s endorsement during the primary election, sought to quell public concerns over the ballot measure during the gubernatorial debate.
“If I have the privilege of serving as governor another term, I guarantee you that I would veto any measure that increased the property taxes for residents, that does not guarantee that any revenue generated from this property tax would be in addition to what’s there” and that didn’t guarantee the money would “go to teachers, students and the classroom,” said Ige. “And finally, we will make sure that none of the taxes get increased on affordable rentals. You know, we clearly are focused on creating affordable rentals, and so certainly all of the concerns raised by those advocating a ‘no,’ I guarantee you, will not occur if I am governor.”
The HSTA said after the debate that Ige’s comments disproved the “misleading scare tactics being spread by opponents.”
If voters pass the ballot measure, it will then fall to the state Legislature to propose and debate any new property taxes.
The political fight over the measure is intensifying with early mail-in ballots going out this week ahead of Election Day. The Affordable Hawaii Coalition, which has raised hundreds of thousands of dollars to defeat the ballot measure, launched a new commercial this week featuring four of Hawaii’s former governors: Neil Abercrombie, John Waihee, Ben Cayetano and George Ariyoshi.
“You know, if you’re a renter you’re going to get smashed,” Abercrombie tells Waihee in a mock conference call. “In fact, everybody’s going to get hurt.”
“It’s a blank check for raising taxes,” Cayetano says.
“You’re going to be taxed twice — once by the city and once by the state,” Abercrombie retorted.