Ige says he may appeal Hawaiian Home Lands court order

Gov. David Ige remains noncommittal on how he intends to respond to a court order instructing the state to significantly boost funding for the Department of Hawaiian Home Lands to comply with the state Constitution.

In November, Circuit Court Judge Jeannette Castagnetti said the state must fund DHHL’s operations to the tune of about $28 million a year. The instructions follow a 2012 Supreme Court ruling that found the state had “failed by any reasonable measure, under the undisputed facts, to provide sufficient funding to DHHL.”

However, Ige’s 2017 fiscal year budget, which he sent to the Legislature on Monday, includes only $9.6 million in general funds for DHHL. Ige also hasn’t increased DHHL’s funding for the current year — the court said the state owed the department about $19 million.

Ige told reporters during a Monday press conference on the budget that it was “premature at this time” to increase DHHL’s funding.

“We are working with the attorney general’s office to understand the court ruling, and once we are clear about what our obligations are, we will be submitting a supplemental request to the Legislature.”

Earlier this month Ige said during an editorial board meeting with the Honolulu Star-Advertiser that he was considering appealing the court ruling.

“I do have some concerns about the decision (relating to) separation of powers,” he said. “I am not aware of any other court being able to direct the Legislature or the executive to appropriate specific amounts.”

Ige’s stance on future funding for DHHL is frustrating for attorneys who sued the state on behalf of Hawaiian beneficiaries, and compounds the state department’s budget concerns.

President Barack Obama’s administration stopped the flow of federal housing dollars to DHHL this year because the department wasn’t using the money fast enough. DHHL has a backlog of $55 million in unspent funds that it received from the Native American Housing Assistance and Self Determination Act of 1996.

The department had been receiving $13 million annually, which was reduced to $9 million in the federal 2015 fiscal year and wiped out entirely this year.

DHHL Director Jobie Masagatani said that the department is hoping it will receive another $9.7 million in federal funding for the 2017 fiscal year but hasn’t received any assurances. She said that DHHL has significantly increased its allocation of the funds.

Meanwhile, DHHL is operating for the first time this year without $30 million in funding that it received annually for 20 years as part of a $600 million court settlement with the state for misusing Hawaiian homelands.

Masagatani said that the budget constraints are hampering the department’s ability to plan for the future. She said the current general fund allocation supports DHHL operations only through the first three quarters of the year. After that, DHHL has to start dipping into special funds it hoped would go solely to the development of homestead lots.

DHHL also has a staff vacancy rate of about 30 percent. Masagatani said it’s hard to fill positions given the insecurities of departmental funding.

“We’re still hoping this issue can be resolved quickly and that we can move forward,” she said.

In the meantime, Masagatani said the department is working to contain expenses by leasing space in its Kapolei office building and looking to invest trust funds in higher-earning assets.

She said that the budget constraints could slow operations and impede DHHL’s ability to whittle down the waiting list for homestead plots, which has grown to include about 27,000 beneficiaries.

“If we don’t have the resources, we aren’t going to be able to deliver as quickly as we would like, and that is just going to mean longer waits,” she said. “We won’t be able to deliver the serv­ices at a level we should for the beneficiaries.”

While Ige said Monday that the administration “did not have all the information it needed” to make a determination about DHHL funding, David Kimo Frankel, an attorney at the Native Hawaiian Legal Corp., which brought the suit against the state in 2007 on behalf of Native Hawaiian beneficiaries, said that the state doesn’t have any other recourse than to comply with the court’s funding instructions.

“The order is very clear on what they need to do,” said Frankel. “There is no question.”

He said that even if the state appeals the decision, it has to comply with the court order unless a judge issues a stay.

“It is an order — it is a court order,” said Frankel.

The 2012 Supreme Court ruling stipulated that the courts could make a determination about appropriate funding levels for DHHL’s administrative and operating expenses, which includes salaries, lease payments, supplies, equipment, utilities, legal fees and travel costs. Further, the courts have found that unlike other departments, the state is required to fund DHHL’s expenses because it was written into the state Constitution in 1978.

“Because the Department of Hawaiian Home Lands is the only department explicitly identified in the Hawaii State Constitution as being guaranteed a level of funding, the state cannot treat it just like every other department when it comes to making budget decisions,” Castagnetti wrote in her November decision.

However, the courts determined that funding for the development of homestead plots and loans was a political question that must be determined by the governor and Legislature.

DHHL also requested nearly $268 million for capital improvement projects for the 2017 fiscal year, including lot development and infrastructure repairs. Ige approved $14.6 million of the request.

The proposed budget will be debated in the Legislature when the session starts in January.