HB2234

SECTION 1. The legislature finds that Hawaiʻi is the only state in the nation with a single, centralized public school district funded and operated exclusively by the State. In every other state, public education is primarily financed through locally assessed real property taxes. As a result, landowners elsewhere bear a direct and proportionate responsibility for supporting the education systems that sustain their communities.

In contrast, Hawaiʻi's public schools are funded largely through state income taxes paid by working families and through the general excise tax, a regressive levy imposed on nearly all goods and services. This structure has produced some of the lowest property tax rates in the nation. These unusually low rates have incentivized real estate speculation and attracted large-scale investment capital, contributing to Hawaiʻi having one of the highest percentages of privately owned land held by out-of-state investors in the United States.

The legislature further finds that this inequitable funding model is not accidental. It is the legacy of the historic dominance of the large landholding corporations commonly known as the "Big Five" — Alexander & Baldwin, Inc.; Castle & Cooke, Inc.; C. Brewer & Co., Ltd.; Theo H. Davies & Co., and Amfac (formerly known as American Factors and originally H. Hackfeld & Co.). These entities used their political and economic power to shape Hawaiʻi's constitutional and fiscal framework so that the State assumed sole responsibility for education funding while severely limiting the ability to raise revenue through taxation of real property. This structure shielded landowners from paying for the education of their workers and tenants; instead, deducting those costs from wages earned and goods purchased.

The legislature finds that the beneficiaries of this system today are no longer plantation-era corporations, but some of the wealthiest individuals and investment entities in the world, including billionaire landowners and absentee investors. These individuals enjoy property tax rates in Hawaiʻi that are far lower than those imposed on comparable properties in their states of residence, while their purchasing power inflates land values, drives up housing costs, and displaces local families. This dynamic undermines community stability, exacerbates inequality, and threatens the long-term viability of local homeownership in Hawaiʻi.

The purpose of this Act is to end longstanding tax inequities, eliminate preferential treatment for large and absentee landowners, and establish county-based school districts funded through real property taxes. This Act seeks to ensure that those who own and profit from Hawaiʻi's land contribute fairly to public education, to reduce the disproportionate tax burden on working families, to protect local residents, and to strengthen community accountability and control over public schools.

SECTION 2. Article X of the Constitution of the State of Hawaii is amended by adding a new section to be appropriately designated and to read as follows:

"COUNTY SCHOOL DISTRICTS

Section . Each county shall incorporate and organize a school district for the establishment, operation and funding of public schools. The boundaries of the school district shall be coextensive with the boundaries of the county.

The governing boards of each county school district shall be authorized to initiate and carry on any programs, activities, or to otherwise act in any manner that is not in conflict with any law.

For the purposes of this section, the county of Kalawao shall be deemed to be included in the county of Maui."

SECTION 3. Article X, section 1, of the Constitution of the State of Hawaii is amended to read as follows:

"PUBLIC EDUCATION

Section 1. The State shall provide for the establishment, support and control of [~~a statewide system of public schools free from sectarian control,~~] a state university, public libraries and such other educational institutions as may be deemed desirable, including physical facilities therefor.

The legislature shall provide for a system of public schools.

There shall be no discrimination in public educational institutions because of race, religion, sex or ancestry; nor shall public funds be appropriated for the support or benefit of any sectarian or nonsectarian private educational institution, except that proceeds of special purpose revenue bonds authorized or issued under section 12 of Article VII may be appropriated to finance or assist:

1. Not-for-profit corporations that provide early childhood education and care facilities serving the general public; and

2. Not-for-profit private nonsectarian and sectarian elementary schools, secondary schools, colleges and universities."

SECTION 4. The two separate questions to be printed on the ballot shall be as follows:

"Shall the public education system in the State be decentralized by requiring the creation of county school districts for the establishment, operation, and funding of public schools?

If so, shall the county school districts be permitted to initiate and carry on any programs, activities, or otherwise act in any manner that is not in conflict with any law?"

SECTION 5. Constitutional material to be repealed is bracketed and stricken. New constitutional material is underscored.

SECTION 6. This amendment shall take effect upon compliance with article XVII, section 3, of the Constitution of the State of Hawaii.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2234
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII