Hawaii governor wants to add $1B to state's emergency funds

(The Center Square) – Hawaii Gov. David Ige said he will ask state lawmakers to deposit $1 billion into the state’s Emergency and Budget Reserve Fund (EBRF) as the economy is improving faster than expected during the COVID-19 pandemic.

The expedited recovery has led to a 27.3% increase in general fund tax revenue during the first five months of fiscal year 2022, Ige said at a news conference.

“We’ve seen increased consumer spending, the rapid recovery of visitor arrivals, and healthy general excise and income tax collections,” Ige said. “The increased revenues allow us to launch initiatives that are responsive to the pandemic and restore critical services that were previously reduced.”

The uncertainty of the pandemic, however, means the state needs to plan for the future, Ige said. Hawaii was hit hard in the early days of the pandemic as national and international tourists stayed home. The state took out a $750 million working capital loan to pay state employees, Ige said.

“We were looking at significant layoffs, in the thousands, of public servants, or furloughs of up to two days a week for all public employees because of the $1.4 billion shortfall that occurred early in the pandemic,” the governor said.

The loan stopped the furloughs and layoffs, Ige said. It will be paid back over five years through fiscal year 2026.

State officials also drained the EBRF, which began fiscal year 2020 with $378.2 million and ended with $58.9 million, according to Ige’s budget proposal.

“As we have seen with the pandemic, we must be prepared to weather the worst,” Ige said. “We had built up the emergency fund prior to the pandemic, and we put the funds to good use in responding to it.”

Ige also introduced a $16.9 billion budget for fiscal year 2023 on Monday, which is 10.2% higher than the current appropriation of $15.364 billion, according to a news release.

The spending plan includes $61.8 million for the state’s Safe Travels program, and to cover National Guard costs and other expenses related to the pandemic. Another $30 million in state and federal funds would be set aside for statewide COVID-19 operations.

The governor is recommending an $8.7 billion general fund, which is 12.2% higher than the current level of $7.759 billion.

The budget also restores $689 million for education and an additional $240 million in funding for public school facilities. The current allocation is $26 million.

The University of Hawaii would receive $2 million to expand the residency program at the John A. Burns School of Medicine and an additional $1.75 million for the university’s nursing programs.

Ige is recommending $17.6 million for 291.5 positions in the Department of Public Safety that will restore the agency to its 2019 staff levels. An additional 193 positions are proposed for the state’s prison system.

The governor is requesting $95 million to improve the state’s housing programs. Ige said 10,000 new homes were built before 2020 ended and another 3,000 units would be finished before the end of 2022.

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