Rather than arguing opposing sides of a single issue in the case originally brought by the county, each side focused on very different questions.

"You don't have to decide if this is the best case, just if this case is good enough. And our answer there is 'No,' " said Robert Thomas, an attorney with Pacific Legal Foundation, said after the hearing Thursday morning.

Meanwhile, Gary Slovin, outside council for Kaua'i County, said the critical question is whether the county's real property tax system should be subject to ballot amendments.

The charter amendment approved in the November 2004 election rolled back property taxes to 1998 levels for those who have lived in their homes since then. For people who bought after 1998, taxes would be based on the assessed value at purchase. Annual tax increases for all homeowners would be capped at 2 percent starting in 2006.

Thomas represents four Kaua'i residents trying to overturn a lower court ruling that struck down the voter-approved amendment.

The case before the justices isn't good enough to address the questions it raises in part because rather than waiting for a taxpayer or someone else with a grievance against the amendment to sue the county government charged with implementing the measure, the county filed its own lawsuit — with the county attorney's office representing both sides in the case, Thomas said.

At the same time, the county — as the plaintiff in the case — also couldn't prove it was damaged by the voter action, he said.

In the past, the Hawai'i Supreme Court has always required proof of injury to bring a lawsuit, he said.

Thomas asked the justices to throw out the lower court ruling.

But Slovin argued that ballot amendments shouldn't be allowed to shoot down tax decisions made by county government, which will then never know if its financial needs will be met by county property taxes.

"If this procedure is acceptable, then there's no limit to what kind of amendments could be advanced in the future," he told the justices.

Slovin pointed to a county charter provision prohibiting voters from changing tax laws by initiative, a process by which voters petition for an ordinance.

"If the charter says you can't do it by initiative, you can't back door that by doing it by ballot amendment," Slovin said later.

Slovin began his argument before the justices by describing how the case involves the county's ability to put together a revenue-dependent budget.

But Slovin was soon interrupted by Chief Justice Ronald Moon who asked him whether the county had claimed any threat of injury in the case.

"Mr. Thomas raises a very good point that your complaint, he indicates, did not allege injury. ... You're saying that it (the case) goes to a very critical aspect of collecting the budget. I think I agree with you. But I don't believe that was alleged," Moon said.

Kaua'i property owners, like most in the Islands, have struggled under escalating property taxes.

Six months after the amendment was approved by voters, the County Council passed its own ordinance capping increases on owner-occupants' taxes at 2 percent.

Taxpayers on Maui are considering a measure similar to the Kaua'i amendment, said Tony Fisher, who sat in on the hearing to learn how the Valley Isle might avoid the legal troubles of Kaua'i.

Fisher said it isn't that those in favor of capping the growth of taxes don't want to pay them.

"You reach a point where you just say, 'I've had enough,"' he said.

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On the Web:

Pacific Legal Foundation: www.pacificlegal.org