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State Legislature adjourns with criticism to budget process

The Hawaiʻi House of Representatives convenes on the last day of the 2023 legislative session in Honolulu on Thursday, May 4, 2023. (AP Photo/Audrey McAvoy)
Audrey McAvoy/AP
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AP
The Hawaiʻi House of Representatives convenes on the last day of the 2023 legislative session in Honolulu on Thursday, May 4, 2023. (AP Photo/Audrey McAvoy)

The 32nd Hawaiʻi State Legislature will be remembered for large investments in housing to help the homeless, but some lawmakers are disappointed in cuts to education and bills that died at the last minute.

More than 200 bills passed this session, with new legislation on firearms, sweeping tax reform measures and government ethics reforms.

The state Legislature closed out its session passing an $11.3 billion budget for fiscal year 2024, with nearly $3 billion in capital improvement funding, and a $10.4 billion operating budget in fiscal year 2025.

In an end-of-session release, the first-term Gov. Josh Green congratulated the Legislature for allocating $280 million to the Rental Housing Revolving Fund, and $48 million to kauhale homeless funding.

"This budget sets $700 million over the next five years to help working families, ALICE (Asset Limited, Income Constrained, and Employed) families in Hawaiʻi. It doubles the earned income tax credit, it doubles the food excise tax credit, and it almost quadruples the Child and Dependent tax credit," House Majority Leader Nadine Nakamura said.

Disagreements on education

While the budget, known as House Bill 300, passed unanimously through the Senate floor, but eight members of the House voted in opposition.

Many cited a dip in public education funding as a major reason for reservations or nay votes.

House Education Chair Justin Woodson of Maui, who voted with reservations, said underfunding the Department of Education by 5% will result in the loss of personnel.

"That may seem like a small number, Speaker, but it is virtually impossible to squeeze out efficiencies in our system to the magnitude of 5%, 7%, 8%," Woodson said Thursday on the floor. "Even if you take out all the unnecessary administrative duties, you're not going to be able to, to cut 7%, 8%, so that means we have to cut people."

Senate Vice President and Education Chair Michelle Kidani of Oʻahu disagreed during a press conference following the Senate's session, noting that there were trade-offs.

"I think the public schools were actually big winners, because with our school, the new School Facilities Authority received $187 million to start the teacher housing projects," Kidani said. She also pointed to the $200 million investment to the SFA for preschool expansion. "So, while it may seem like they lost some in other areas, they gained ... for teachers, for pre-K and the teacher housings."

The state budget is crafted in several drafts, and because of a culmination of late submittals and a worsening revenue forecast, the deadline became rushed.

"For the house, we didn't get any indication of what the current administration wanted, until well into our process of working," House Chair Kyle Yamashita of Maui said Thursday.

"I think once we fell behind, then I think it became harder and harder for us to catch up," he said later on. "That's when we were working on all these things without including more people, because we just didn't have time to call people and get people involved, so I think some of the frustration by the members can be fixed."

House Finance Committee Chair Kyle Yamashita speaks to reporters in Honolulu on Thursday, May 4, 2023. (AP Photo/Audrey McAvoy)
Audrey McAvoy/AP
/
AP
House Finance Committee Chair Kyle Yamashita speaks to reporters in Honolulu on Thursday, May 4, 2023. (AP Photo/Audrey McAvoy)

"Guardrails"

Frustration was heard on the floor Tuesday and Thursday.

Rep. Della Au Bellati of Oʻahu cast her first no vote for the budget in a decade, saying the budget failed in both substance and process this year.

"This underfunding of public education and higher education comes at a time when we have a budget surplus, and we are exceeding the budget expenditure ceiling by $1,063,767,367," Bellati said.

The budget contains a $200 million proviso which will allow the executive branch to direct funds appropriately to departments.

"It is widely known that this budget proviso was negotiated after the fact of the voting on this measure," Bellati said.

But Yamashita said it's typical for a proviso to be determined after the budget is approved. Further, he said there are "guardrails" that will require the executive branch to notify the Legislature of the movement of these funds two weeks prior to use. "So we're comfortable with it," Yamashita said.

"It's a biennium budget, so we still can address it next year, and as Speaker said, there are mechanisms to address any kind of shortfall," Yamashita said.

Potential uses for the budget proviso include funding the Hawaiʻi Tourism Authority, which was left out of the budget entirely.

"We knew about the budget proviso and the decision was made to try and help HTA preserve some of their core functions with a portion of that money," House Tourism Chair Sean Quinlan of Oʻahu said.

"We're not just going to give them X dollar amount and say good luck and call it a day. We'd like the board to make very specific requests to Budget and Finance, which would then be reviewed by the administration and the legislature so we can have a little more accountability," Quinlan said.

Catch up on past coverage from this session:

Sabrina Bodon was Hawaiʻi Public Radio's government reporter.
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