City and County of Honolulu v. State. Petition for Extraordinary Writ Seeking Pre-Election Relief, filed 09/26/2018.

431 P.3d 1228, 143 Haw. 455
Hawaii Supreme Court·Decided December 20, 2018·No. SCPW-18-0000733·Published·Cited by 5 cases

Opinion

RECKTENWALD, C.J., NAKAYAMA, McKENNA, POLLACK, AND WILSON, JJ.

OPINION OF THE COURT BY POLLACK, J.

The right of the people to shape the way in which they are governed through free and fair elections is the basis of our democratic society. At no time is this dynamic more pronounced than when the public is called upon to approve revisions to the Hawai'i Constitution, the foundational document on which our state government is based. In order for the electorate to effectively exercise this most basic of rights, however, a ballot must be capable of rendering a knowing and deliberate expression of voter choice. Thus, when a constitutional amendment is presented to the electorate for ratification, both our constitution and statutes require that the question posed to voters must be clear and neither misleading nor deceptive. And it is *1231 this court's duty to preserve the integrity of the electoral process by invalidating a question that fails to meet this standard.

In this case, several counties of the State of Hawai'i challenged a ballot question authored by the state legislature that would approve an amendment granting the State the authority to impose a surcharge on investment real property. The challengers argue that the ballot question was unclear and likely to mislead or deceive an average voter. Upon review, this court determined that the ballot question as written did not comply with the requirement that its language and meaning be clear and not misleading. We accordingly declared the ballot question invalid, stating at the time that this opinion would follow. We now elaborate as to our reasoning.

I. BACKGROUND AND PROCEDURAL HISTORY

A. Real Property Taxation in Hawai'i

From the beginning of statehood until 1980, the Hawai'i Constitution fully reserved the taxing power to the State, delegable to the counties at the Hawai'i legislature's sole discretion. County of Kaua'i ex rel. Nakazawa v. Baptiste , 115 Hawai'i 15 , 20, 165 P.3d 916 , 921 (2007) (quoting Haw. Const. art. VII, § 3 (1968) ). As a result, a hybrid system of real property taxation developed within the state. Although the counties were statutorily authorized to set the specific tax rates applicable to land within their borders, the State retained all other relevant responsibilities, including the creation of exemptions, the administrative adjudication of tax appeals, and the actual collection of tax funds. See Stand. Comm. Rep. No. 42 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 594-95 (1980). After the State was reimbursed for its administrative expenses, all revenues derived from real property taxes were remitted to the counties for their operations. Id. The counties depended heavily on these monetary transfers for their operating income, and by the time of the 1978 Constitutional Convention, the shared responsibility had become a "sore point between counties and the State." 2 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 247 (1980).

Prior to the 1978 Convention, county officials began to express frustration that the patchwork of concurrent authority had created confusion and a lack of accountability between the State and counties, with voters unable to determine "what level of government [was] responsible for the real property tax bite." Id. ; accord Stand. Comm. Rep. No. 42 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 594-95. Further, county officials contended that the counties had differing needs and economic bases that were not fully served by state-wide tax policies, and that it was unfair that the counties were tasked with the full management of local affairs but had little control over their primary source of income. See Stand. Comm. Rep. No. 42 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 595; 2 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 247-48.

Responding to these concerns, the delegates adopted a proposed amendment to the Hawai'i Constitution granting the counties exclusive authority over all functions related to the taxation of real property. 1 See 1 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 1198 (setting forth Haw. Const. art. VIII, § 3 as amended). A report from the Committee on Local Government indicates the transfer was intended to grant the counties full control over their finances, eliminate public confusion as to which level of government was responsible for real property taxes, further the democratic ideal of home rule, and allow the counties flexibility in addressing their unique local needs. Stand. Comm. Rep. No. 42 in 1 Proceedings of the Constitutional Convention of Hawai'i of 1978, at 595. The amendment was subsequently approved by Hawai'i voters, and article VIII, section 3 of the Hawai'i Constitution now states in full as follows:

*1232 The taxing power shall be reserved to the State, except so much thereof as may be delegated by the legislature to the political subdivisions, and except that all functions, powers and duties relating to the taxation of real property shall be exercised exclusively by the counties , with the exception of the county of Kalawao. The legislature shall have the power to apportion state revenues among the several political subdivisions.

(Emphasis added.) Thus, only the counties currently possess the constitutional authority to levy a tax on real property within the State of Hawai'i.

B. Senate Bill 2922

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City and County of Honolulu v. State. Petition for Extraordinary Writ Seeking Pre-Election Relief, filed 09/26/2018., 431 P.3d 1228, 143 Haw. 455 (haw 2018).

431 P.3d 1228 (City and County of Honolulu v. State. Petition for Extraordinary Writ Seeking Pre-Election Relief, filed 09/26/2018.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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