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Relief money plugs hole in proposed Hawaii budget

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Financial aid included in the most recent federal coronavirus relief package will allow Hawaii to cover unemployment insurance claims and avoid slashing spending on key social programs like sexual assault treatment and HIV prevention, lawmakers say.

The state House of Representatives is scheduled to vote today on a proposed two-year state budget that includes such spending. If the bill passes, it will head to the Senate.

Hawaii received $1.6 billion that it can apply to its budget from the Biden administration’s COVID-19 relief bill. The law, signed earlier this month by President Joe Biden, allocates some additional money directly to the state Department of Education and the Department of Hawaiian Home Lands.

State Rep. Sylvia Luke, chairwoman of the House Finance Committee, said her panel appropriated the entire amount for use over the next two fiscal years starting in July, underscoring how much Hawaii needs the money.

“If we didn’t have the $1.6 billion of federal relief, it would have been very difficult for us to pass the budget,” Luke said. Her committee advanced the budget bill last week.

They put the largest chunk of the federal aid — $700 million — toward repaying the U.S. Department of Labor for money the state borrowed to pay unemployment insurance benefits.

Hawaii’s unemployment insurance trust fund contained about $500 million before March 2020. But the balance swiftly dwindled when the pandemic shut down the tourism industry, the state’s jobless rate skyrocketed and benefit payments soared. The state then borrowed to keep paying claims.

House lawmakers set aside $105 million to allow the state Department of Labor and Industrial Relations to keep an extra 100 people on staff to continue processing additional unemployment claims as well as hire 300 more people.

Luke said some of the money would pay for a ticketing system that would allow claimants to get an appointment to talk to a representative instead of calling and waiting on hold for hours.

The federal funding will allow the state to continue funding for programs like the Sex Abuse Treatment Center, which provides medical care, crisis counseling and therapy to survivors of sex assault.

Gov. David Ige’s budget proposal, which was submitted to the Legislature before Biden signed the aid package, would have cut some $700,000 from the center’s budget over the next two fiscal years.

Luke said that would have resulted in services being unavailable on weekends and nights.

“That would be devastating because we can’t tell sexual assault victims to come back at 8 o’clock on Monday,” Luke said.

Other programs identified for cuts by the administration that have had their funding restored by Luke’s committee include HIV prevention and treatment, tuberculosis control, family planning and prenatal care.

Beth Giesting, director of the Hawaii Budget and Policy Center, said she still needs to see more details of the House budget but is optimistic Hawaii won’t have to drastically cut spending on social programs as feared in the early months of the pandemic.

In May the state Council on Revenues predicted general fund tax tax receipts would drop 12% during the current fiscal year. But the reality has been somewhat less bleak, as tourism has recovered modestly and personal incomes haven’t dropped as much as anticipated due to unemployment benefit payments.

Luke said the House budget doesn’t rely on tax increases, but there are still some bills at the Legislature that could raise taxes.

Luke said she supports a “green fee” on travelers to help the state pay for managing public parks and natural resources.

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