Supreme Court hears Kaua‘i v. Kaua‘i

Hawai‘i’s five Supreme Court justices heard roughly two hours worth of arguments yesterday for the case in which the county of Kaua‘i is both plaintiff and defendant.

The high court is expected to render a decision within six months; however, no official timeline has been determined.

Honolulu Attorney Gary Slovin represented the county of Kaua‘i in the case, while Deputy County Attorney Rosa Flores represented Mayor Bryan Baptiste, the County Council and Finance Director Wallace Rezentes Jr.

Robert Thomas, an attorney for the Pacific Legal Foundation, represented the Kaua‘i residents who helped get the measure, also known as Ohana Kauai tax relief, on the ballot.

The initiative called for the stabilization of property assessments in three residential classes.

The final decision of the Hawai‘i Supreme Court not only could determine whether residents will pay lower property taxes, but also could help set a precedent to determine whether a Hawai‘i county can legally sue itself.

The lawsuit, originally brought by the County Attorney’s Office against Kaua‘i residents, came after 75 percent of the voters passed a tax relief measure in November 2004.

While county officials questioned the legality of the tax cut, thus suspending it, Thomas said the lawsuit never should have been brought by county officials in the first place.

“The people have had to hire private attorneys to represent the county,” Thomas said. “The County Council should be spending money to defend the case and implement it.”

Thomas said the case brings into question which entity — whether a body of taxpayers or a municipality — is ultimately defined as the “county.”

Lani Nakazawa, the former county attorney, originally filed the case on the basis that the Hawai‘i Constitution puts counties in charge of property taxes.

Nakazawa claimed that “counties” referred to “County Councils,” not residents.

In a prepared statement, Flores said she was “pleased that the Mayor, County Council and Director of Finance were allowed to have their position heard from the Hawai‘i Supreme Court.”

Now that the arguments have been heard, Thomas said all he can hope for is that the Supreme Court ustices understand the intricacies of the case.

“I have every indication from the type of questioning that they were on top of this issue,” Thomas said.

Monroe Richman, one of the residents to create the Ohana Kauai tax measure, said he was impressed with what he perceived as an impartial view from five justices.

“I think (the Hawai‘i Supreme Court) was demonstrably impartial in comparison to what we were exposed to on Kaua‘i,” Richman said.

The case made it to the high court after Fifth Judicial Circuit Court Chief Judge George Masuoka refused dismissing the case in January 2005.

Richman also noted that he didn’t feel the $230,000 was well spent on Slovin’s legal fees.

Slovin did not return several phone calls from The Garden Island.

“The whole premise of (Slovin’s) argument was that this tax relief would overburden the county by taking 82 percent of its budget,” Richman said, noting that what Slovin purported to be a $77 million impact on Kauai‘s budget was actually closer to $8 million.

Richman also questioned why Slovin would focus on the burden the tax relief would put on the county, when the five Supreme Court justices were supposed to hear arguments surrounding the legality of the lawsuit.

While it is unclear how much the county would lose if the Ohana Tax Relief went into effect, the amount the county has spent on this lawsuit also remains unknown, as the county will not disclose the legal costs of its cases.

In a prepared statement, Flores has said the amount the county has paid in legal fees “must remain confidential in order for the County Attorney’s Office to avoid providing a manifestly unfair advantage to any person who is a present or potential litigant against the County.”

• Amanda C. Gregg, staff writer, can be reached at 245-3681 (ext. 252) or agregg@kauaipubco.com.