As Hawai‘i voters begin receiving their ballots for the general election, they may ask: What does Constitutional Amendment Question 2 actually mean?
Two proposed amendments to the state constitution will be on the ballot this election. One of those is self-explanatory — should the state Senate be allowed 60 days to appoint judges and justices between April and January, instead of the current 30 days — but the other may seem complicated.
Constitutional Amendment Question 2 asks whether the state should allow the counties to issue “Resilient Infrastructure for Shelter and Equity bonds” — or RISE bonds — to help fund public improvement projects. These bonds would be repaid by future tax revenues on the new developments funded by said bonds, without imposing additional taxes or raising tax rates, and would be exempt from the counties’ debt limit.
The proposed amendment was introduced in the state Senate this year with the stated purpose of attempting to lower the development costs of affordable housing. As noted in Senate Bill 3219 — the measure introducing the amendment — the development of new homes requires large up-front investments in water, drainage and other infrastructure.
Rep. Luke Evslin, chair of the House Committee on Housing, said Wednesday that the solution to this has been either to pass on those up-front costs to homebuyers, leading to rising house prices and a lack of affordable housing, or to raise taxes.
RISE bonds would, in theory, present a third option by allowing counties to fund that infrastructure, with the debt being serviced by future increases in tax revenue specifically generated by those selfsame new developments made possible by the infrastructure.
This is not an original concept; 48 other states, excluding Hawai‘i and Arizona, use “tax increment financing bonds,” which operate on the same principle.
Evslin told Aloha State Daily Wednesday that it’s only due to a quirk in Hawai‘i's constitution that the state doesn’t also use these bonds. He said the constitution as written does not permit the counties to issue such bonds, hence the need for a constitutional amendment.
Evslin emphasized that the bonds do not bring an increase in taxes. The property taxes paid by new homeowners in a new development made possible by the bonds will be at the same tax rate as any other comparable development, but the revenues from those taxes will go to pay off the bond, rather than back to the county.
However, Gov. Josh Green said Wednesday that this does not mean the bonds will reduce the counties' tax revenues, as the tax revenues generated by these new developments do not currently exist. Rather than reduce existing revenues, the bonds will simply redirect some future revenues.
Furthermore, the amendment would exempt RISE bonds from counties’ debt limits, which Evslin said means a county could issue any number of the bonds — although, he added, because developments funded via the bonds will still require taxpayer-funded services such as police and fire department responses, counties will likely be judicious in how many they issue.
Evslin said that the tax increment financing bonds are typically structured conservatively so that the municipality that issues them takes on little to no risk. He said in the event of a disaster wiping out the infrastructure investments — something he said has happened in California — typically the bondholder, not the municipality, is left holding the bag.
The proposal was nigh-universally popular as it passed through the legislature, with major unions such as the Pacific Resource Partnership and the General Contractors Association of Hawai‘i voicing strong support of the amendment. This week, the Chamber of Commerce Hawai‘i urged members to vote yes on Question 2.
One of the few people to testify against the proposal, Hawai‘i County resident Cindy Freitas, warned about the potential for lost tax revenue and the lack of guardrails for how much of a county’s tax base can be captured by the bonds.
But Green and several other lawmakers spoke in favor of the amendment Wednesday. Honolulu Mayor Rick Blangiardi said there is a roughly 28,000 unit deficit of housing on O‘ahu, which he said RISE bonds can help to reduce.
Kaua‘i Mayor Derek Kawakami called the bonds “a monumental change to how we fund infrastructure,” adding that, after the many disasters of 2026, it is clear that the state’s resilience is dependent on having modern and reliable infrastructure.
“Communities can only be as resilient as the roads that connect us,” Kawakami said.
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