Governor David Ige announced his proposed executive budget at a press conference on December 17, 2018, emphasizing funding to his administration’s priority areas like education, housing and watershed protection. The proposed executive operating budget for Fiscal Year (FY) 2020 would be $15.47 billion, with another $15.7 billion for FY 2021, of which $8.04 billion will come out of the general fund in 2020, with $8.29 billion coming out of the general fund in 2021. The executive capital improvement project (CIP) budget would be $2.02 billion in FY 2020 and $1.48 billion in FY2021. The current executive operating budget (FY 2019) is $14.4 billion.

Despite the increase in executive operating budget from FY 2019, the governor says he is actually taking a fiscally conservative stance. Although the Council on Revenues is projecting an economic growth rate of 5 percent, the governor said that the first quarter revenues from the current Fiscal Biennium (FB 2017–2019) have been “all over the place,” leading the administration to assume a more conservative growth rate of 3.5 percent. That 1.5 percent difference accounts for somewhere between 150–180 million fewer dollars. With many predictions that the United States is heading toward another recession period, this may indeed turn out to be a prudent decision, even if it means less discretionary spending on the public good.

A full 54 percent of the proposed executive budget will need to go to covering fixed costs like Medicaid funding and, importantly, funding for public pension and other post-employment benefits—so called “unfunded liabilities.” (HBPC will be releasing a full report on this subject in the coming weeks). This is up from 47 percent of the executive budget in FY 2019 and reflects the administrations ongoing commitment to control the state’s debt obligations to its public employees.

Governor Ige’s Spending Priorities

So what’s left to spend on? The largest portion of the proposed general obligation bond-funded CIP budget will go toward education infrastructure projects, according to the governor. This includes an emphasis on girls’ athletic facilities to bring the state’s Department of Education (DOE) into compliance with Title IX (the DOE is under suit by the ACLU of Hawaiʻi for failing to adhere to the federal law after reporting by Honolulu Civil Beat‘s Suevon Lee exposed inequities in boys’ and girls’ facilities at Campbell High School in ʻEwa Beach).

The proposed budget includes $3 million for the “Innovation Fund” under the weighted student formula; $6 million for facility repair and maintenance; $400 million for infrastructure improvements; $200,000 for additional staff and expansion of early learning facilities; $14.3 million for renovations to Pre-K classrooms, statewide; $1.5 million for early college programs; $19 million to expand the four-year degree component of the “Hawaiʻi Promise Program” (HPP), which provides funding for eligible students to go to college, to include all three of the state’s four-year campuses; and $700,000 to fund the community college component of HPP.

Affordable housing is another priority issue, and the proposed budget allocates $75 million to the dwelling unit revolving fund (which will allow for infrastructure upgrades that pave the way for affordable housing developments); $200 million to the rental housing revolving fund to build those units; and $40 million to the Department of Hawaiian Homelands lot development program.

As apart from the issue of housing development itself, the proposed budget also sets aside money to provide services to help homeless individuals and families get back on their feet. The budget proposal includes $7.5 million for Housing First programs that include wrap-around services for mental healthcare and drug addiction; and another $7.5 million to help move families out of shelters and into permanent housing. The proposed budget also includes $9,484,900 to fund 151 new positions at the State Hospital to expand the complex’s capacity to provide forensic mental healthcare services in a new facility (“forensic” refers to individuals who have entered the justice system).

Governor Ige’s “Sustainable Hawaiʻi” plan pulls in a proposed $311,724 to fund four new positions to execute the “Hawaiʻi Interagency Biosecurity Plan” and another $2 million for the Hawaiʻi Invasive Species Council. Another $12.5 million would go to the Agricultural Loan Revolving Fund. Watershed protection would see a $10.4 million investment, while the Agrobusiness Development Corporation would receive $1,384,944 to fund two new positions. Another $2.6 million would go to the Kahuku Agricultural Park Improvements project, and the state would invest $13.1 million in irrigation system improvements in Waimanalo, Molokai and Waimea Valley on Kauaʻi. Taken together, this money is being touted by the administration as a means to fortify Hawaiʻi’s bio- and food security.

The governor mentioned the increasing rate and force of storms and other climate change-related natural disasters as the reason for a massive increase in the Major Disaster Fund, from $500,000 to $5 million over the course of the Fiscal Biennium. The governor’s budget also requests $125 million for a state match to a $345 million federal appropriation for a flood mitigation project for the Ala Wai Canal (the proposed project is actually 11 different projects throughout the Ala Wai watershed, which includes Makiki, Manoa, Palolo and Moʻiliʻili) to prevent billions of dollars of predicted damage and lost revenue as sea level rise threatens the Waikiki business district.

One final highlight of the proposed budget is money allocated to modernize the state’s Information Technology infrastructure for things like taxes, highways, workers’ compensation and employee retirement benefits. The governor did not provide a specific dollar amount for these upgrades, but said they would require “tens of millions of dollars” in allocations.

The proposed executive budget will need to be approved by the State Legislature during the upcoming 2019 session.