The state Department of Hawaiian Home Lands has a backlog of more than $55 million in unspent federal housing funds for Native Hawaiians, and President Barack Obama’s administration finally stopped the flow of additional housing funding last fiscal year under the Native Hawaiian Housing Block Grant program.
The state had been receiving $13 million a year in federal funding under the Native American Housing Assistance and Self Determination Act of 1996 for housing for Native Hawaiians on Hawaiian homelands.
That funding was reduced to $9 million in federal fiscal year 2015 and was wiped out entirely in the current fiscal year, according to records provided by the U.S. Department of Housing and Urban Development.
That backlog in federal housing funding and two similar backlogs of unspent federal funds for transportation projects and drinking water infrastructure will be the subject of a hearing Thursday by the state Senate Ways and Means Committee.
Ways and Means Chairwoman Jill Tokuda said she has been told HUD interrupted the funding for the block grant program because the state wasn’t able to spend down the federal funds that have already been set aside.
“At this point it’s jeopardizing future funding,” Tokuda said of the funding backlogs. “Especially in those areas where we have such high needs — housing, transportation infrastructure, we’re dealing with homelessness, we’re dealing with environmental needs — you can’t say there haven’t been demands for these kinds of resources, and to leave money like that on the table, that’s unacceptable.”
Niniau Simmons, NAHASDA manager for DHHL, said the department had a $75 million backlog when she joined DHHL in 2012, and has reduced it by investing in infrastructure to prepare for the construction of 117 homes in Kealakehe in North Kona on Hawaii island, and about 100 homes in Kapolei. HUD money will also be used to install infrastructure for 40 lots in Kula, Maui.
Those projects are expected to account for nearly $30 million, and additional NAHASDA money will soon be spent on actual home construction at those sites, Simmons said.
DHHL was without a NAHASDA manager for about 18 months starting in 2011, which contributed to the backlog, she said.
More recently the department had planned to set aside a significant portion of NAHASDA funding to provide loans for homesteaders who cannot qualify for ordinary loans to build homes, Simmons said. However, HUD told the department that the money for the loans would not be considered “spent” until the loans actually close, a process that is expected to take some time. That means the loan program won’t absorb as much of the HUD funding as quickly as the department had expected.
Lawmakers will be scrutinizing two other bottlenecks of federal funding at the Thursday hearing.
The federal government is withholding $8 million that was earmarked for repairing Hawaii’s drinking water infrastructure because the Hawaii Department of Health has been too slow to spend federal funds, according to the U.S. Environmental Protection Agency.
The annual allotment is usually deposited into the Health Department’s Drinking Water State Revolving Fund and loaned out to the counties to fix water mains and leaking pipes or to clean contaminants from drinking water.
But the Health Department has failed to meet targets for drawing down the balance of the fund, which at the end of last year stood at $100 million.
The largest of the backlogs in federal funding involves transportation. The Federal Highway Administration has warned the state Department of Transportation that Hawaii could lose out on federal funding unless the state processes its highway projects more quickly and reduces the backlog of unspent federal transportation money.
That backlog peaked in 2010 at $940 million in federally funded highway projects. The federal government had set aside money for those projects, but the state was unable to move them forward and the money remained unspent.
Since then the state has reduced that to $656.5 million, according to an Oct. 2 letter from FHWA Hawaii Division Administrator Mayela Sosa. Hawaii receives about $160 million in new federal highway funding each year, and the federal government wants the backlog reduced to no more than $450 million over the next three years.
Tokuda (D, Kailua-Kaneohe) said Hawaii is “at a time when we definitely need to make sure that we maximize every resource and dollar that we have access to.”
“These are no small amounts,” Tokuda said. “As we know, the federal government is not exactly flush with resources either, and if they feel that we don’t have a good solid plan as to how we’re going to be spending not just the backlog, but utilizing resources going forward, we may not be in a good position to be requesting future resources.”
The Thursday hearing begins at 1:30 p.m. in Room 211 of the state Capitol.