The state House of Representatives passed a $21 billion operating budget for the next two years. However, the budget remains in flux as decisions at the federal level create uncertainty at the state Capitol.
“It's going to be challenging going forward because the key is uncertainty, right, we don't know what the future holds for us,” House Finance Committee Chair Kyle Yamashita said, adding that it’s not clear how President Donald Trump's decisions will impact Hawaiʻi.
Lawmakers are still tracking the effects on tourism and the cost of construction – one of the main industries propping up Hawaiʻi's economy.
That’s why House lawmakers put $200 million into the state’s rainy day fund to help fill gaps left by impacts to federal funding.
But the budget that House lawmakers passed on Wednesday sticks to the commitments they set at the start of the legislative session: housing, health, and core services.
Some highlights include a $290 million infusion into the state’s two affordable housing funds and about $30 million to ensure better reimbursement rates for medical professionals.
Yamashita said the state will likely be able to weather federal funding cuts in the hundreds of millions of dollars — but tough choices will need to be made down the road.
“As I said, we've passed many bills, as well as the Senate has passed, that are bills that require an appropriation. So these measures, while important, may need to be postponed or pushed back to deal with what is before us,” he added.
House Speaker Nadine Nakamura told members that they should begin preparing to possibly return for a special legislative session to deal with federal impacts — like cuts to Medicaid.
Meanwhile, the state Council on Revenues also decreased the state’s projected revenue growth this year to 5% from a prior 6.4% — largely due to similar federal decision uncertainty.
That decreased projection is what the state Senate will need to consider as the budget crosses over from the House.
