State's high court strikes Kauai tax cap

A bid to cap property taxes through a Kauai County Charter amendment was declared unconstitutional by the state Supreme Court this week.

The court's 3-2 ruling also bars anyone but government officials from setting tax policy, eliminating the possibility of voter-initiated tax relief measures in any county, said one lawyer involved in the proceedings.

"This decision represents a real loss to the people of Kauai," said lawyer Robert Thomas, of the Pacific Legal Foundation, which lost the appeal. "It has told them that their votes don't count."

The decision stems from a Kauai County Charter amendment, dubbed the "Ohana Amendment," that would have rolled back property taxes for resident homeowners to their 1998 levels, and capped increases at 2 percent per year.

Voters responding to exponential increases in property taxes overwhelmingly supported the measure in 2004.

Just after the election, however, the county sued itself -- with the county attorney and the county seeking to keep the finance director and the Council from enacting the amendment.

Four Kauai homeowners, part of the nonprofit Ohana Kauai, which fought to get the amendment on the ballot in the first place, intervened on behalf of the voters.

But in 2005 a Kauai judge ruled that the amendment was unconstitutional. The four homeowners, represented by the Pacific Legal Foundation, appealed earlier this year.

Kauai County Council members, who publicly asked for members of the community to vote down the measure, applauded the decision.

"I am grateful to the Hawaii Supreme Court for providing clarification on this critical issue and for confirming that the county's position is in line with the Hawaii Constitution," said Kauai County Council Chairman Bill "Kaipo" Asing.

Kauai Mayor Bryan Baptiste said more still needs to be done to make the taxation system fair to everyone.

"There are no winners or losers in this issue. It's simply a matter of clarification on the laws we have to function by," he added.

Thomas said the court's ruling will likely keep voters in other counties from following Ohana Kauai's example.

"This decision says that it is government officials who have the exclusive say on property taxes, not the people who pay them," he said.