State budget to make use of dwindling pandemic funds, grow reserves
The state's revenues have grown about 6.5% over the last year, reported Department of Budget and Finance director Luis Salaveria on Wednesday.
That financial picture may help the new governor’s state budget.
Gov. Josh Green submitted his first biennial budget, spanning fiscal years 2024 and 2025, late last month.
In general fund costs, Green has allotted $9.8 billion for fiscal year 2024, which begins July 1, 2023 and $9.6 billion in fiscal year 2025, which begins the following year. This is a $667 million increase from the state’s previous budget.
Much of the budget was designed by former-Gov. David Ige’s administration, and as more time passes, it’ll change as Green’s administration sets forth more initiatives and directives.
Salaveria says the use of dwindling pandemic-related money will be crucial in the 2024 budget that begins July 1 of this year.
“The state was very fortunate over the past several years to receive a significant amount of federal funding during the pandemic, but as it stands at this point in time, we cannot rely upon that infusion for much longer,” Salaveria said. “Therefore, it's really imperative that we really create what we're calling a structurally-balanced budget and financial plan.”
To do that, he says his 'primary objective' is growing the state’s reserves.
“We are positioning the state to strengthen that policy by requesting an additional $500 million that would be added to the state's hard emergency budget and reserve fund.”
Salaveria says this will expand the state’s ending balance from 10% of general fund revenues to 15%. This, he says, would allow the state more flexibility in the future.
“A lot of that is really to kind of establish that structural balance, and also to basically put our state in a position where we really look good in front of the rating agencies,” Salaveria said.