Editorial: Hopeful bills for housing, income

All by itself, the unified stance by leaders of the state House and Senate and Gov. David Ige, who have crafted an ambitious agenda for the new legislative session, sends the taxpaying public a hopeful message.

Elected leaders met last week with the Honolulu Star-Advertiser editorial board. And at least for now, at the outset of the 2020 Legislature, the state’s top policymakers are on the same page — which is a departure from the strained relations of past sessions.

Their intent is a good one: to provide some drastically needed relief for Hawaii struggling households.

Anyone who has read the sobering ALICE Report from Aloha United Way, as the lawmakers have done, will be convinced that drastic action is required.

ALICE stands for “Asset Limited, Income Constrained, Employed.” More than a third of Hawaii’s households, 37%, fall into this category because they face financial hardship.

Correctly, the leadership has examined the main costs of family life and selected these as entry points for intervention, with the hope of making a difference.

Housing is the biggest, followed by the cost of early education and other aspects of child care shouldered by working families.

Also, lawmakers’ approach will be to nudge the minimum hourly wage upwards to $13 by 2024, in four steps. That’s not as high as the $15-$17 hourly minimum some advocates have recommended, but it makes sense that lawmakers would not want to heap the entire burden of “reducing income inequality” onto the backs of employers.

Along with the tax reforms that should supplement pay packages for Hawaii’s working poor, the goal is to lower other major costs as well, ultimately helping people cover their expenses more securely. Here is how the plan is laid out:

>> Housing

Building more affordable homes is the daunting primary task. The state proposes to invest $200 million in general obligation bonds toward infrastructure in the area of the University of Hawaii at West Oahu.

In addition, the state will identify publicly-owned properties that can be used to develop up to 17,000 99-year leasehold lots over the next five years. The governor said that this high hurdle is attainable — although it also means persuading the public to embrace leasehold ownership decades after a mammoth legal battle breaking up Hawaii’s leasehold land base will be a challenge.

However, he proposes that the equity that accrues in these state-owned properties could be shared between the state and the homeowner. This, the elected leaders said, will provide an incentive for developers to build housing at price points the state wants, below 140% of the area median income.

If that sounds high, it is. Lawmakers said the legislation will be geared toward making that a ceiling for the Hawaii Housing Finance and Development Corp., which distributes affordable-housing financing.

Although lawmakers point out that housing affordable at all income ranges is needed, the approach should be to ensure that more of the units fall in the range closer to the median, and below.

This also will require a greater resolve from county authorities that permit projects to keep more of the stock within affordability boundaries. The public at least has top leaders on the record making this promise.

>> Income inequality

Legislators rightly plan to extend the Hawaii earned income tax credit, that was due to sunset after the 2022 tax period. The refundable food excise tax credit is being increased to $150 and is refundable, meaning qualified families can get it, regardless of whether they have a tax liability.

The total tax relief package is designed to deliver up to $70 million to the working class and low-income households. Along with a bump in the minimum wage, this will put more money in the pockets of those who then will spend it and stimulate the local economy.

>> Early learning and schools

Lawmakers want to advance Hawaii’s longstanding goal of making early learning accessible to more children. Their proposal that finding private partners to add capacity and programs, using state facilities as a jumpstart, is a promising one.

They appear to be losing patience with the state Department of Education in its sluggish management of school facilities. The question is whether their idea of shifting major construction to a new School Facilities Agency offers a solution or merely yields another bloated government bureaucracy.

Legislators will have to work to disprove the latter, which seems the more likely outcome. Facilities initially moved to the DOE because of the lagging facilities output of the Department of Accounting and General Services. Showing how a third bureaucracy would succeed where the others failed will be a tough climb.

And the climb toward all these goals is just beginning, with many stumbles possible before the end. Without holding their breath, advocates for Hawaii’s hard-pressed families can take hope from at least an energetic opening move in this long Capitol game.