State lawmakers have decided to make a modest $5 million deposit into the state’s “rainy day” budget reserve fund instead of issuing taxpayer refunds from the state budget surplus this year.

Whenever the state ends two consecutive fiscal years with a general treasury surplus of more than 5% of general fund revenues, the Hawaii Constitution requires lawmakers to either make a refund to state taxpayers, or to tuck away some cash as reserves or payments against future state obligations.

The state ended fiscal year 2018 with a general treasury balance of $894 million, and ended last fiscal year fiscal year with $750 million, which triggered that constitutional requirement.

In some other years when that constitutional provision kicked in, lawmakers have opted to give taxpayers a “refund” of $1 each. This year, they chose another approach.

A House-Senate conference committee agreed Monday to appropriate $5 million in Senate Bill 494 for the emergency and budget reserve fund, which is a cache of money that is set aside to help the state navigate unexpected budget shortfalls and economic downturns. The fund now has a balance of more than $375 million.

House Finance Committee Chairwoman Sylvia Luke said lawmakers opted to put money in the rainy day fund instead of issuing a refund to taxpayers because the growth in state tax collections has been tapering off and “we are looking at kind of a slow time.”

Rather than issuing taxpayer refunds or paying down other state obligations, “we thought it would make fiscal sense to put (money), even if it’s a little bit into rainy day, just to shore up a little bit more the rainy day (fund),” she said.

SB 494 is scheduled for final votes in the House and Senate later this week.