Hawaii Constitution Article VII Taxation and Finance
Hawaii Constitution – Article VII: Taxation and Finance
Overview:
Article VII of the Hawaii Constitution establishes the framework for the state’s taxation system, fiscal management, and financial policies. It sets limits, authorizes taxes, and ensures responsible use of public funds to maintain a balanced and fair economic environment.
Key Sections and Provisions:
§1. Taxation Power and Purposes
The State of Hawaii has the power to tax for public purposes.
Taxes must be uniform upon the same class of subjects.
Property may be taxed for public purposes but not beyond fair market value.
§2. Prohibition of Poll Taxes
No poll or capitation tax shall ever be levied or collected in Hawaii.
§3. Property Tax Exemptions
The legislature may exempt:
Property used for religious, charitable, or educational purposes.
Property of the state or counties.
Specific exemptions must be uniformly applied.
§4. Tax Limitations
Taxation may not discriminate or impose unfair burdens.
Special privileges in taxation are prohibited.
§5. Taxation of Intangibles and Corporations
The legislature may tax intangible personal property and corporations.
Subject to uniformity and fairness principles.
§6. State Budget and Appropriations
The legislature must enact an annual balanced budget.
No money may be expended or obligated without legislative appropriation.
The governor is responsible for preparing and submitting the budget proposal.
§7. Public Debt Limits
The state may not incur debt beyond constitutional limits.
Debt must be used for public works and improvements.
Procedures for issuing bonds and incurring debt are regulated to ensure fiscal responsibility.
§8. Emergency Financial Powers
In emergencies, the governor may exercise limited financial powers with legislative approval.
§9. Audit and Financial Accountability
The legislature shall provide for the audit of all public accounts.
Officials handling public funds are held to strict standards of accountability.
Significance:
Article VII ensures taxation is fair, uniform, and limited to public purposes.
It enforces fiscal responsibility through balanced budgets and regulated public debt.
Protects taxpayers by prohibiting regressive taxes like poll taxes.
Establishes a framework for financial transparency and accountability.
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