The Advertiser’s Jerry Burris writes Echoes of California’s Prop. 13 in Kauai tax case with thoughts about the County of Kauai ex rel. Nakazawa v. Baptiste appeal:
There are some interesting legal niceties in this case that will become fodder for law school classes for years to come.
The first is the oddity that the
More reports on yesterday’s HAWSCT arguments in County of Kauai ex rel. Nakazawa v. Baptiste, the appeal challenging the “Kauai v. Kauai” intragovernmental challenge to 2004’s Ohana Kauai property tax Charter Amendment.
The Supreme Court of Hawaii heard arguments today in the appeal involving 2004’s property tax Charter Amendment from Kauai. Details of the case and issue here.
Coverage of today’s arguments:
Past coverage of the appeal:
Continue Reading ▪ Supreme Court of Hawaii Hears Property Tax Arguments
On February 15, 2007 from 9:00 – 10:00 a.m., the Supreme Court of Hawaii will hear oral arguments in County of Kauai ex rel. Nakazawa v. Baptiste, the appeal involving 2004’s “Ohana Kauai” charter amendment.
The hearing will be held in the Supreme Court courtroom in the JudiciaryBuilding on King Street in Honolulu
Both eminent domain and property taxes are hot topics of the moment.
Eminent domain because the recent approval by the Honolulu city council of the multibillion dollar mass transit project will require the taking of private property. Home and business owners are rightly concerned about their options if the transit system, where ever it is
The Supreme Court of Hawaii has scheduled rare oral argument in the Kauai Charter Amendment property tax appeal. The issues include standing of government officials to sue themselves to obtain declaratory judgments, and the constitutional role of the counties in establishing real property tax policy. Details of the case, including links to the merits briefs here.
Arguments will be held in the Supreme Court courtroom in the Judiciary Building on Thursday, February 15, 2007 beginning at 9:00 a.m. Each side is allowed one-half hour for argument. The proceedings are open to the public and the media.
Continue Reading ▪ HAWSCT Oral Arguments – Feb. 15, 2007 @ 9 am
The Supreme Court of Hawaii issued an order reversing its earlier denial of oral arguments in the appeal about the legality of the Kauai Charter amendment relating to property taxes. Details of the appeal are posted here, and our briefs in the case can be found here or from the links on your right under “Briefs – Ohana Kauai Property Tax merits/reply brief.”
The facts of the case are straightforward: the people of the County of Kauai approved an amendment to their Charter addressing property taxes, but after the election, the County Attorney sued the county Mayor and other county officials asserting the amendment is illegal. The County Attorney represents both sides in the lawsuit, and the litigation was backed with a $100,000 war chest of taxpayer money, earmarked to hire private lawyers to attack the amendment.
No one was defending the legality of the Charter Amendment, so several local homeowners were forced to intervene, but the trial court dismissed their objections and ruled in favor of the County Attorney/Mayor. I represent the homeowners on appeal.
There are three issues in the appeal:
1. Standing/justiciability: May the County Attorney dispense entirely with the injury and controversy requirements for standing to sue, and is she entitled to “inherent” standing merely by virtue of her office?
2. Hawaii Constitution: By delegating real property tax power to “the counties,” did the people of Hawaii in article VIII, section 3 of the Hawaii Constitution grant the power only to county councils, to the exclusion of the people of the counties acting in accordance with their charter?
3. Charter Amendment: Can an amendment to a county’s charter violate the existing charter, when the amendment was proposed, certified, labeled, and passed as a charter amendment?
Continue Reading ▪ HAWSCT to Hear Oral Arguments in Kauai Property Tax Appeal
An earlier version of this commentary was published in the Honolulu Advertiser
According to Kaua’i government officials, how much property tax homeowners pay is an issue too important to be trusted to the people who pay them.
In recent years, the median value of Kaua’i homes has soared to nearly $700,000, a 48 percent increase this past year alone. The staggering prices are the product of a hyperactive market fueled by speculation, and investors flush with cash willing to pay top dollar for modest properties.
A rise in market value has little benefit to those who have no intention of selling. When a neighbor’s home sells, or is upgraded by a new owner, all of the properties in the neighborhood see an increase in assessed value, which the tax collector uses to justify increased property taxes.
There is little a homeowner can do, except challenge the assessment through the often byzantine maze of local bureaucracy, with only a slight chance of success.
Since 1998, the average Kaua’i homeowner experienced a nearly 50 percent increase in property tax, and county coffers are bulging. But middle-class families of longtime Kaua’i residents, seniors and others on fixed incomes are in danger of being taxed out of their homes.
After years to trying to convince their elected officials to provide tax relief, the people of Kaua’i exercised their right to change the system themselves. Local homeowners proposed an amendment to the Kaua’i Charter to roll back property taxes to 1998 levels for owner-occupied homes.
For those who bought their homes after 1998, property taxes are based on the assessment at the time of purchase. Yearly tax increases for all resident homeowners are capped at 2 percent.
Under this system, resident homeowners are not at the mercy of an unpredictable and volatile housing market and are able to plan their property-tax liability from year to year and to budget accordingly.
And there is no surprise to the new purchaser, who is able to factor future property-tax liability into the decision to buy.
The charter amendment was placed on the November 2004 ballot, and in the run-up to the vote, virtually every Kaua’i elected official attacked the measure, with the mayor and the County Council leading the charge.
They claimed it would adversely affect their ability to provide services. However, since 1998, the Kaua’i budget has risen 50 percent, and the current budget increased 25 percent over last year’s alone. Kaua’i government spending is now a record $123 million.
In spite of the organized and well-financed opposition, the people of Kaua’i approved the measure by a nearly 2-to-1 margin. Instead of accepting this decisive political defeat, Kaua’i officials went to court.
Against themselves.
The Kaua’i county attorney sued the mayor, the finance director and the County Council. The claim: the County Council has a monopoly on property-tax policy, and the people of the county had no right to propose and vote on the charter amendment.
To top it off, the county attorney represents both sides in the lawsuit. The litigation is backed by a $100,000 war chest of taxpayer money, budgeted for private lawyers hired to attack the charter amendment.
Four local homeowners intervened in the officials-against-themselves case. They argued that government officials should not be able to concoct a lawsuit, in which they are both the plaintiff and the defendant, in order to gain court approval for their claimed real-property-tax policy monopoly.
The Kaua’i Circuit Court voided the charter amendment, ruling that only county councils may set property-tax policy, and the people have no right to do it themselves by amending their charter.
The homeowners have now appealed to the state Supreme Court because the people — not just local politicians — have the right to vote and decide on how property taxes are imposed.
Until now, this case has received scant attention beyond Kaua’i’s shores, but Honolulu property owners should take notice.
With similar market forces at work and an average 26 percent increase in property value, Honolulu homeowners are beginning to rethink whether property taxes should be tied to an unpredictable housing market that penalizes long-term owners for not selling their properties.
Would Honolulu’s politicians consider enacting a measure like Kaua’i’s? If the Kaua’i case is any guide, it is doubtful.
Property-tax relief only comes when government officials understand that if they don’t provide it, the people will. Or when the people — fed up with inaction of government officials — do it themselves.
If the arguments of Kaua’i officials prevail on appeal, however, the right of the people to directly set property-tax policy will be lost forever. If this occurs, any incentive for government officials to reform the current property-tax system will drop dramatically.
In the end, this case will determine whether “we the people” determine how much property tax we are willing to bear, or whether the politicians alone have control.
Download the briefs in this appeal: Merits Brief | Reply Brief