$13.5B draft budget would fund hospitals

State senators announced a new proposed draft of next year’s state budget Tuesday that includes money for a bailout of Wahiawa General Hospital as well as $160 million to rebuild much of the Hawaii State Hospital for the mentally ill in Kaneohe.

The proposed new $13.5 billion budget would leave the state on track to spend more money next year than it collects in taxes and other revenue, but Senate Ways and Means Chairwoman Jill Tokuda said she did not immediately know how much revenues would lag behind expenses.

Both Gov. David Ige and House lawmakers also proposed budgets for next year that would have the state spending more cash than it takes in, but the final amounts won’t be decided until later in the session.

Lawmakers still haven’t decided whether they will accept a number of Ige administration proposals that would increase the amount the state spends next year.

Ige has proposed that the state prepay nearly $163 million next year in future retirement health care costs, and also proposed banking $100 million in the state’s “Rainy Day” budget reserve fund. Tokuda said she did not include either of those big-ticket items in the latest budget draft, but lawmakers could partially or fully fund those initiatives later by passing separate appropriations bills.

Also still pending are separate bills to fund new union contracts for thousands of public workers.

So far, lawmakers have received requests from the Ige administration for more than $22 million from the general treasury next year to pay for increases in wages and fringe benefits for unionized state law enforcement officers; water safety officers; and administrative, technical and professional employees in the University of Hawaii system.

Those costs are not included in the Senate budget, and more money might be required to cover the cost of at least one additional union settlement that is pending.

This would not be the first time in recent years the state has spent more than it collected. The Ige administration projected in December the state will spend about $63 million more this year than it will collect in taxes. The state is able to do that because it has a cash surplus that carried over from last year.

Tokuda (D, Kailua-­Kaneohe) described the Senate’s draft budget as “a well-rounded and very balanced request.”

“We looked for ways that we could create a budget that balanced multiple priorities, programs and serv­ices without adding unsustainable costs going forward, and this required looking carefully at base appropriations and ensuring that existing funds are first being considered before more are appropriated,” she said.

She said the Senate draft of the budget includes an appropriation of $4.5 million to subsidize the University of Hawaii Cancer Center, but said UH will have to produce $1.5 million of that from its existing funding.

Tokuda also said the Senate budget includes more than $7.3 million in general funds for homeless services and programs, including $3 million for the Housing First Program, $1.1 million for outreach services for the homeless and $2 million for rapid rehousing.

The budget also includes $1.1 million in general funds for 16 new rental assistance positions for employees who will try to “leverage more federal housing vouchers going forward,” Tokuda said.

The second-floor Ways and Means Committee hearing room and lanai at the Capitol was crowded with supporters of Wahiawa General Hospital, which has requested help from the state to allow it to avoid bankruptcy.

Hospital officials have asked lawmakers to fund a $3 million bailout of the private, nonprofit facility this year and provide another $3 million to support the hospital next year. They say revenue at Wahiawa in 2015 abruptly dropped by $7.5 million after the Queen’s Medical Center-West opened in May.

Sen. Donovan Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka) announced that the new draft budget includes $5 million to buy the land under a parking area at the hospital, which would give the hospital an injection of cash. The state can then lease the land back to the hospital for a nominal amount, he said.

R. Don Olden, chief executive officer of the hospital, said he will discuss that proposal with his board of directors.

Dela Cruz said the draft Senate budget also includes $40 million for a new secondary school in Kapolei and $38 million for continued construction of a new high school in Kihei, Maui.

To address the shortage of affordable housing, the Ways and Means committee included allocation of more than $35 million to the Hawaii Public Housing Authority and $50 million to the Rental Housing Trust Fund to develop affordable rentals, Dela Cruz said.

He said the draft budget also includes $160 million going to Hawaii State Hospital “for a new and much-needed forensic facility to house high-risk patients.”

The new draft of the budget now goes to the full Senate for further consideration.