$14M in University Of Hawaii Funding In Legislative Crosshairs

Jan 6, 2020

The 2020 state legislative session hasn’t even begun, but already a dispute is brewing over funding for the University of Hawaii.

The disagreement centers on who pays the cost of fringe benefits like healthcare for certain university employees. Around 1,000 positions within UH were authorized by lawmakers, but they did not initially have funding for salaries and benefits.

In 2005, an unofficial agreement between the university, the state Legislature, and then Gov. Linda Lingle apparently split the cost.

State Sen. Donna Mercado Kim, a frequent critic of the university, says she never knew about the deal -- that's despite being in the Legislature for 20 years and chairing the Senate committee that controls the budget.

“There’s no line item on our budget planning to show this amount of money that we pay in fringe and there's nothing formalized,” Kim said in a Friday hearing.

University administrators say the cost-sharing agreement began as an effort to reduce UH’s reliance on tax revenue as a source of funding, but the deal was apparently never codified in writing or law.  

If the Legislature drops the share it’s currently paying, the university would need to cover the entire cost. University of Hawaii President David Lassner says that's akin to a $14 million budget cut.

“That would be saying the university has to pay the fringe on these legislatively authorized positions, even though the Legislature isn't providing the general funds for them,” Lassner told lawmakers.

In relative terms, $14 million is a small figure, less than half of one percent of the tax revenue given to the university by lawmakers for fiscal year 2019.

Tuition and fees provide slightly over 50 percent of the university's more than $1 billion operating budget. Last year, declining enrollment prompted the UH Board of Regents to freeze tuition until 2023.