March 2007 | Small Business News
Kauai's Tax Case Heard in Supreme Court
by Malia Zimmerman
HawaiiReporter.com
Thursday, February 15, 2007, was a monumental day for Kauai resident Walter Lewis and thousands of property taxpayers in that county who supported a 2004 local charter amendment to limit their property tax increases by a two-thirds affirmative vote.
Lewis and Ohana Kauai, a group he co-founded to get the measure passed, took a legal appeal in County of Kauai ex rel. Nakazawa v. Baptiste to the Hawaii Supreme Court where Robert Thomas, Managing Attorney of Pacific Legal Foundation's Hawaii Center, offered oral arguments on their behalf.
Thomas is the Small Business Hawaii Civic Leadership recipient for 2005.
During the hour-long hearing, Thomas presented to 5 Supreme Court justices his clients' arguments. He offered a brief rebuttal to Gary Slovin of the Oahu-based Goodsill Anderson law firm, who represented the Kauai county government at a cost of $235,000.
The story behind how Ohana Kauai got to the Hawaii Supreme Court starts in 2003 when about a dozen property owners wanted to address concerns that the county government was increasing property taxes and government spending at record rates. Many residents, including those on fixed incomes, saw their property taxes double in 7 years.
Ohana Kauai members tried to persuade Kauai County Council's seven members to embrace property tax relief, but they were ignored. Ohana Kauai collected 3,000 signatures from the island's registered voters and successfully got a charter amendment on the ballot. The amendment capped property tax increases at 2 percent and rolled back property tax bills to what they were in 1999 for owner occupant properties.
County officials, who snubbed the movement until the week before the election, were genuinely shocked at the group's success. The county and the mayor, in conjunction with the public union leaders who wanted the tax revenue for pay raises, funded aggressive advertisements against the charter amendment.
They told county workers they would lose their jobs. They told residents that services would be cut.
The county's efforts were too little and too late - Ohana Kauai was victorious, winning two of every three votes in the 2004 election.
Rather than adhere to the wishes of voters, county officials conspired to kill the amendment after the fact.
In what legal experts call a "bizarre" twist, Kauai County attorneys filed a lawsuit against the county administration over the amendment,
The county government won round two. The state's Fifth Circuit Court ruled the charter amendment was actually a ballot initiative that levied or repealed a tax, which is not legal under Kauai County Charter - this despite the fact that the county deemed it a legal charter amendment before the election.
The non-profit Pacific Legal Foundation agreed to appeal the case to the Hawaii Supreme Court at no charge to Kauai residents.
The justices can issue a written opinion at their discretion. Depending on how they rule, narrowly or broadly, they could determine the underlying question of who the county represents - the will of the people or the will of the government.
The case is extremely important to the people of Kauai and other groups throughout the state challenging the county governments on skyrocketing taxes: Thomas says: "The people of Kauai -- not local politicians -- are the ones who have the right to vote and decide on property taxes. We're confident the Hawaii Supreme Court will agree that when the voters speak,government officials should listen”
More details on the case at
http://www.inversecondemnation.com
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