The Honolulu City Charter Commission, at its Tuesday, January 24th meeting, blocked a proposal pushed forward by citizens to allow voters to vote on tax-related issues.

Specifically the commission turned down these two citizen recommendations that Charter Section 3-401 be amended as follows:

Section 3-401. Declaration —

*1. Power. The power of electors to propose and adopt ordinances shall be the initiative power.

*2. Limitation. The initiative power shall not extend to any ordinance authorizing or repealing [the levy of taxes,] the appropriation of money, the issuance of bonds, the salaries of county employees or officers, or any matter governed by collective bargaining contracts.

The effect of the suggested deletion of four words, in brackets above, would be to permit future voters to bring initiative proposals to the electorate on tax matters.

Keep in mind, however, that an initiative in Honolulu does require the collection of at least 45,000 valid signatures before any initiative can be placed on the ballot.

Currently, the City and County of Honolulu has authority to levy two principal taxes, property taxes and a surcharge on the state general excise tax, and the voters have no ability to consider, at the ballot box, any alternatives brought to them by citizen initiative.

Testimony was presented to the Charter Commission in favor of the initiative change by the League of Women Voters, Let Honolulu Vote, Councilmember Djou, and several individuals.

Points were made that initiative efforts give the voter more choices (which is always better) and that the high petition thresholds (45,000+ valid signatures) offered protection against frivolous matters being brought to the people.

Testimony opposed to the initiative change was presented by the Ms. Waterhouse, Budget Director for Honolulu, Mr. Abe speaking for the Democrat Party of Honolulu, Councilmember Gary Okino, and several individuals.

The opposition suggested that chaos in budget and financial planning would result and that voters are not able to understand the complex tax issues that would be presented to them on a ballot.

One Commission member (Ms. Darolyn Lendio) raised the question as to whether Article 8, section 3 of the State Constitution grants taxing authority to County Councils exclusively or to County Councils acting for the ultimate authority – the voters.

There is a current matter before the State Supreme Court that may address this question in the context of the Kauai refusal by the County Council to accept the results of a voter win in the last election to set property tax caps.

In an effort to discover if the pending case may offer insight into the legality of the proposed Honolulu charter change the Honolulu County Corporation Counsel was asked to opine. She was unable to be definitive and no other person present could enlighten the group on this legal question.

With little other discussion by the Commissioners; a vote was taken on the two identical amendments. The Commission members voted 100 percent ”’NO”’ on the first proposal and all NO on the second except the Chair, Mr. Takaki, who seemed to express some embarrassment at a potential second 100 percent ”’NO”’ vote.

Since any action by the Commission was to simply pass this issue on to a future meeting that could benefit from additional testimony; it seems rather preemptory to cut off discussion when even one of the Commissioners raised a legal question that no one, including Corporation Counsel, could answer.

A disinterested observer might have thought, on balance, that the Commission would have wanted more opinions on the question of state granted authority and, therefore, would err on the side of getting one more round of public testimony.

Alas, resolution of outstanding questions was not a vital interest of the Commission, and instead they quickly moved to defeat any voter involvement in future tax matters. The action of the Charter Commission is clear that it’s members do not want Honolulu taxpayers and voters to have any direct voice in tax matters.

It is unfortunate that California and Proposition 13 always come up when the word initiative is mentioned. It seems that politicians who do not like to be “second guessed” believe that the California experience is a disaster and Hawaii should never be subjected to such “chaos.”

Many voters in California must have a different view since Proposition 13 has been in effect for many years and the same initiative power that installed Prop. 13 could easily be used to remove the proposition. California, however, is not a good example to use when considering what initiative on tax matters might do to Honolulu.

First of all, California has a ”’state”’ initiative law (not a county), the state has 30 million residents (versus less than 1 million in Honolulu), and a state government has taxing authority that is much wider than the limited Honolulu City and County existing authority.

To suggest that California has not suffered from voter involvement in government actions one should visit the Initiative and Referendum Institute — See http://www.iandrinstitute.org/

Prof. John Matsuasaka* concludes, in the research report abstract printed below, that initiative, even at the state level, had little adverse effect on California resource allocation/collection as evidenced by the final allocation/colleciton decisions.

”’Does direct democracy make it impossible to balance the government budget? I address this question with evidence from California, where it is widely believed that voter initiatives have paralyzed the state budget process by locking in high spending while at the same time prohibiting tax increases. A review of all initiatives approved since 1912 shows that no more than 32 percent of appropriations in the 2003-04 budget were locked in by initiatives, and initiatives placed only minimal constraints on the legislatures ability to raise revenue. Moreover, it seems likely that the legislature would have allocated much of the money to its dedicated purpose even if not required to do so by initiative. Initiatives do not appear to be a significant obstacle to balancing the state budget in California.*”’

Now that no change to allow voters to opine on Honolulu tax maters will be recommended by the Honolulu Charter Commission; the public interest will need to be served by direct voter action.

LET HONOLULU VOTE has started the petition drive and intends to collect the 45,000 signatures required to place the exact same charter amendment discussed above on the November ballot.

Voters interested in assisting with this effort should contact Bob Kessler or me (CO CHAIRS) at mailto:lethonoluluvote@aol.com

Petition circulators, donations, and all sorts of volunteer help are needed to carry out this major effort.

”’For a copy of the petition in an Adobe Acrobat pdf version, go to:”’
“2006 Petition file”

”’For more information about the petition — in an Adobe Acrobat pdf version — go to:”’
“About the Petition file”

”’Paul E. Smith is the Co Chair of LET HONOLULU VOTE, and a member of the board of the Tax Foundation of Hawaii and Grassroot Institute of Hawaii. Reach him via email at”’ mailto:lethonoluluvote@aol.com

”’HawaiiReporter.com reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to:”’ mailto:Malia@HawaiiReporter.com

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