Lawmakers and Gov. Josh Green had similar priorities this session, but to balance the next biennium’s budget, Green made 22 reductions in funding or straight-up vetoes. What’s left is $20.6 billion across fiscal years 2024 and 2025.
"We have homelessness to address, we have a housing shortage to address, we don't have enough health care providers. That's where our money needs to be spent right now," Green said.
But revenues got in the way. Starker projections from the Council on Revenues lowered anticipated dollars coming into the state. From March to May, projects plummeted by three percentage points.
Green and staff were then tasked with cutting a little more than $1 billion over two years for the budget beginning July 1.
"This is a larger budget than we've had before. It demonstrates lots of need and lots of commitment, and I would have loved to see the Council on Revenues be up higher," Green said during a press conference Wednesday. "I personally think the Council on Revenues overshot on the downside."
Among the cuts were many infrastructure-related projects in favor of social programs. Cuts were made to a proposed first responder technology park, solar energy loan program and some broadband matching.
Sen. Donovan Dela Cruz, who chairs the budget-focused Committee on Ways and Means, has taken on the first responder campus as a project. Dela Cruz said he and Green met over the weekend to discuss it.
"We look forward to working together during the interim to address the State's needs to relocate and modernize our First Responder's critical infrastructure next session," Dela Cruz said in a written statement. "He assured me he is committed to finding alternatives to address the challenges."
Green said he was "just not willing to take away from housing for health care" on a project that isn't fully fleshed out.
"We want to be really clear, because we learned lessons from the (Honolulu) rail, which was started at one cost, and then got gigantic, and a lot of people don't want that to happen again," Green said.
The budget proved to be continuous at the end of session, when eight representatives voted against House Bill 300 on the last day, citing cut education and a less than transparent process that added a $200 million proviso for the governor to use at his will with legislature notice.
Green has said the money will go to the vastly underfunded Hawaiʻi Tourism Authority, the state Department of Education and the University of Hawaiʻi.
"I strongly considered having a week or two special session of additional time to work through these things, but because we were given the capacity to fill in those small pukas, we're able to manage everything out through reductions and that mechanism," Green said.
Green said he's "likely" to give the Department of Education $55 million and $25 million to the University of Hawaiʻi. The money will potentially go to a workforce preparation program at the DOE and Title IX programs at UH.
This type of notice on line-item vetoes of the budget is unusual, House Finance Chair Kyle Yamashita said. By law, the governor has 35 days following sine die, or June 26 this year, to submit vetoes. The Legislature has until July 11 to override.
Yamashita didn't comment on specific line-items, but said he wants to look at the budget in "totality."
"We want to kind of look at the big picture, and then, like I said, meet with the leadership and the (majority) caucus and of course we have to get agreement with the Senate," Yamashita said. "So we'll be going through that process."
Hawaiʻi is a borrowing state, Green said, so carrying over money to preserve its bond rating is critical. About $500 million will carry over in these fiscal years, another reduction made in Green's vetoes.
“A sound budget and appropriate reserve levels are also needed to help maintain strong bond ratings that can positively affect borrowing costs associated with our capital improvement projects," Green said.
The carry-over balance allows for flexibility during the fiscal year, Director of Budget and Finance Luis Salaveria said. Examples could be lower projections from the Council on Revenues or a major shortfall.
"The carry-over balance gives the administration and the state the flexibility to address for changes in revenue forecasts during the fiscal year outside of the legislative session, and that's what the rating agencies all look forward to, because they do want the state to have the flexibility to go out and actually structurally make those changes," Salaveria explained.
According to the Office of the Governor, the 22 line-item vetoes include:
- Reducing $4 million in FY24 from Enterprise Technology Services for Relocation of Data Center; leaving $1 million
- Reducing $1.05 million in FY24 from Department of Accounting and General Services Public Works Division for Proof of concept and master planning
- Reducing $500k in FY24 for Enterprise Technology Services relocation of Mapunapuna Baseyard
- Reducing $50M in FY24 for the First Responder Tech Park
- Reducing $1.5M in FY24 for East Kapolei Infrastructure; leaving $500k
- Reducing $18.5M in FY24 for Kakaʻako Street Upgrades
- Reducing $42M in FY24 for Kalaeloa electric upgrades; leaving $5M
- Reducing $61M in FY24 for Iwilei-Kapālama infrastructure; leaving $25M
- Reducing $88.8M in FY24 for irrigation infrastructure; leaving $5M
- Reducing $5 million in FY24 from Department of Agriculture Mitigation and Population Control of Feral Animals (Department of Land and Natural Resources will undertake this work)
- Reducing $2M in FY24 for Department of Business, Economic Development, and Tourism Hawaiʻi Center for Advanced Transportation Technologies for energy tech, microgrid, and other related programs; leaving $2M
- Reducing $33M in FY25 for Broadband Federal Matching; leaving $33M in FY24 for state match
- Reducing $500M in FY25 for the Emergency Budget Reserve Fund; leaving $500M in FY24 to meet reserve target
- Reducing $50M in FY24 for Hawaiʻi Green Infrastructure Authority solar energy storage loan program; leaving $50M in FY24 to launch program
- Reducing $12M in FY24 for the Department of Defense; plan, design, construction, and equipment for new headquarters
- Reducing $120M in FY24 for Teacher Housing; leaving $50M in FY24 to launch program
- Reducing $3M in FY24 for Department of Human Resources and Development Computer Equipment
- Reducing $5M in FY24 for Department of Law Enforcement Training Center for New Building
- Reducing $5M in FY24 for Department of Land and Natural Resources for forestry resource management; leaving $20M in FY24
- Reducing $25M in FY24 for State Parks renovations and improvements; leaving $25M in FY24
- Reducing $100k in FY24 for Kawehewehe Waikīkī Boardwalk
- Reducing $60.2M in FY24 for Department of Land Division of Boating and Ocean Recreation
Catch up on past stories from this year's session:
