Gov. Josh Green signed a measure Wednesday to disperse $50 million in additional funding to nonprofits impacted by federal cuts.
However, a few lawmakers say there are constitutional issues surrounding how organizations will be chosen for funding.
The new law is in response to federal funding cuts that started happening during the legislative session.
The need for relief is high for nonprofits
“It's as much as $400 million in federal funding that goes directly to nonprofits in a calendar year. So this is $50 million, so definitely a small subset of that,” said Hawaiʻi Alliance of Nonprofit Organizations CEO Melissa Miyashiro.
“We know the need is much greater, but this can help with that near-term bandaid.”
Miyashiro explained that the nonprofits hit hardest by federal cuts work in the health and human services, climate resilience, and arts and culture sectors.
“From our conversations with similar state associations in other states, we believe that Hawaiʻi is the first state to step up for nonprofits in this way,” she said.
“I think there's an opportunity for us to lead by example and show others across the country that the work of nonprofits is really important for our resilience.”
The new law raises constitutional questions
The state Legislature has already completed its yearly grants-in-aid process. Nonprofits could apply before the regular session, and lawmakers decided how the $30 million for nonprofits would be distributed through the budget bill.
This new law allocates an additional $50 million. A key difference is that a committee of four lawmakers, two senators appointed by Senate President Ron Kouchi and two representatives appointed by House Speaker Nadine Nakamura, will decide which organizations receive funds.
None of those meetings will be open to the public.
That provision was inserted into the measure during conference committee — after all public hearings on the bill were closed.
“I've only become more and more concerned since May when we first passed this bill into law because it directly contravenes the requirement in our state constitution that says that any legislative committee shall be open to the public,” said Rep. Della Au Belatti.
“I think people want to say it's normal, it's being efficient, but we cannot sacrifice the spending of taxpayers' monies with a process that is even potentially flawed.”
Belatti is concerned that the measure could set a new standard at the Legislature, normalizing this type of closed-door decision-making.
“If it goes forward and becomes something that we commonly practice, can you imagine committees of four granting $50 million, $100 million just amongst themselves?” she said.
“That's not appropriate, and I think we need to spend taxpayers' money more wisely and with more fidelity and more openness.”
Lawmakers call for a special session
Belatti, along with Reps. Kim Coco Iwamoto and Amy Perruso, called for a special session in the coming months to award the funds through an expedited grants-in-aid process — and increase the amount of funding available to nonprofits in need.
“I feel like the speaker of the House and the Senate president, by setting aside three weeks during the fall, we basically made the people of Hawaiʻi think we were going to address this when we knew what was happening,” Iwamoto said.
“We know what's happening, and yet it doesn't feel like we have sustained our commitment to have the special session. … The Legislature is going to be receiving a huge pay increase come 2027, and a lot of the rhetoric has been ‘we work all year round.’ Well, let's prove it to the people of Hawaiʻi that we are willing to do the work and earn that pay increase.”
The House is also currently being sued over an advisory committee not having open meetings at the start of the legislative session. That case is awaiting a judicial decision.
A lawyer representing the plaintiffs in that case, Lance Collins, also raised constitutional concerns about the new law.
“The big issue with it is that it's a violation of separation of powers . The Legislature's power is to appropriate funds from the state treasury, and it is the executive branch's job to spend that money,” he said.
“When this committee makes this decision, they're basically telling Aloha United Way this is where you need to write the check — that's an executive function.”
Aloha United Way will help administer and distribute the grant awards. Collins added that once the Legislature appropriates funds, the governor must then approve and release those funds, with the exception of a legislative supermajority to override a governor’s veto — which he said the new law does not fulfill.
“Trying to find more efficient and effective ways of doing the government's business is something that should be supported, but it has to be within the confines of constitutional limits,” Collins said.
“I think, as we've seen on the national level, when constitutional standards and limits are transgressed, chaos ensues.”
Green disagreed with constitutional criticisms of the new law.
"We have that kind of perpetual drumbeat just attacking anything when good work is being done, and I think if we do see lawsuits against this bill, it would be pretty cynical because these $50 million are going to ultimately go to people who are hungry, people who are suffering from domestic violence, people who are losing their health care coverage, people who don't have a health center available to them," he said.
"People love to toss emails out and to try to create some controversy, but to tell you the truth, I won't have it. I think we have to help people, and I think it's very important that we call it for what it is, which is cynical, ugly behavior. And I will commend the Legislature for finding the foresight to get monies out there when the legislative actions at the federal level are going to hurt us."
Details on the grants process are still being decided
No definitive timeline was given on when applications would be available to nonprofits or when the legislative selection committee would be appointed, although Green expected leadership to give him names this month.
It was also not yet clear if all $50 million would be distributed at once or on a rolling basis.
Green told reporters that some lawmakers present at the bill signing would likely be on the committee. That included Senate Assistant Majority Whip Troy Hashimoto, House Finance Committee Chair Chris Todd and Rep. Daniel Holt.
Todd explained that he understands the concerns, but urged people to give the committee a chance.
“I would just ask that people try their best to be patient. Everyone's coming together with really pure motives in mind. We all want to see this assistance granted to these nonprofits that are specifically impacted by federal cuts,” he said.
“If people have input on what they'd like to see, feel free to reach out to people and let that be heard, but in the meantime, I don't want people to assume the worst before we've even laid anything out.”
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