Recently, there has been fierce debate over Bill 42 before the Honolulu City Council. Here’s the background: In 2007, the city passed Ordinance 07-001, which says that the Honolulu rail project would be funded only with proceeds of the general excise tax surcharge and federal money.
On Oct. 18, the Supreme Court of Hawaii held oral argument on a petition by the four counties to invalidate “Con-Am,” the constitutional amendment ballot measure that would allow the state to slap a “surcharge,” essentially an additional property tax, on “investment” real property.
This week, we look at another provision that was passed by the 1978 Constitutional Convention to assure our fiscal health — and what our lawmakers have done to marginalize it. As we mentioned in June, Hawaii Constitution Article VII, sections 8 and 9, limit general fund expenditures by an “expenditure ceiling.”
Those of us who are getting along in years may remember the “general income tax credit,” a line on our state income tax return where we could claim a $1 credit. The saga of this credit tells us a little about a bold move undertaken in the 1978 Constitutional Convention and our lawmakers’ reaction, which was to beat it into insignificance within a couple of years.
Lots of the controversy swirling around the ballot measure seeking to impose a “surcharge” on investment property to support public education involves our Department of Education. The DOE currently receives an appropriation from the state’s general fund of about $2 billion and is also able to pull from other funding sources such as federal funds.
The news recently mentioned a lawsuit that the City and County of Honolulu, now joined by the other three counties, has leveled against our state government regarding the Hawaii State Teachers Association-sponsored constitutional amendment. The counties, obviously not overjoyed at the prospect of the state slapping a surcharge on their primary source of revenue, want the courts to void the ballot question.
One of the more unique property tax exemptions in the City & County of Honolulu is the exemption for “Historic Residential Real Property Dedicated for Preservation.” Under the exemption ordinance, owners of historic homes can save thousands of dollars in real property taxes every year if they put up a certain plaque, allow viewing of the home and meet other requirements.