Gov. David Ige’s budget plan would boost spending, restore some pandemic cuts

Gov. David Ige unveiled a budget plan ahead of the upcoming 2022 legislative session that calls for a 10.2% increase in the state operating budget and a 12.2% increase in general fund spending as Hawaii’s economy improves but uncertainty remains over future federal funding and the impact of the omicron COVID-19 variant.

The operating budget would increase to $16.926 billion in fiscal year 2023 from $16.017 billion in fiscal year 2022 under Ige’s proposal. The general fund budget would increase by $942.3 million, to $8.701 billion in fiscal year 2023.

Ige’s budget is designed to help restore $1 billion in cuts over the past two years of the pandemic, including “very painful cuts to education,” he said Monday in unveiling his budget. Ige called himself a proud graduate of Pearl City High School and the University of Hawaii.

Increasing UH funding is designed to help the university system graduate more health care workers and help fill a neighbor island doctor shortage, as the need for stepped-up resources has been magnified by COVID-19, Ige said. Some $2.04 million would expand UH’s John A. Burns School of Medicine’s residency program to the neighbor islands, and $1.75 million would support UH’s nursing programs.

Ige also hopes that increased UH funding will produce more graduates in information technology and digital media. Both fields of study have seen an “explosion” in local job opportunities, especially with three television series currently filming in Hawaii.

Additionally, Ige hopes to sock away $1 billion into the state’s so-called “rainy day” Emergency and Budget Reserve Fund “because the federal government may not be able to assist as generously in the future.”

House Finance Chairwoman Sylvia Luke (D, Punchbowl-Pauoa-Nuuanu) said that proposal was her biggest concern.

“I’m very uncomfortable about putting $1 billion into the rainy day fund when we have so many needs that we need to take care of right now for the benefit of the public after two years of a pandemic,” Luke said.

Ige’s budget addresses affordable housing but offers few details and is silent on issues such as homelessness and mental illness that were likely exacerbated by the pandemic and resulting unemployment, Luke said.

“We basically somehow put issues such as homeless issues on the back burner with so many crises — such as unemployment — coming right after another,” Luke said. “And we have to address affordable housing to keep our people at home. The problems didn’t go away. They just increased exponentially.”

Ige also hopes to fund, or increase funding, to:

>> The Hawaii Tourism Authority, which the Legislature thrashed last session by cutting off its automatic source of funding. Ige unsuccessfully defended the HTA and said Monday that it has transitioned from a marketing organization to an agency focused on managing Hawaii’s tourism industry. The $60 million that Ige proposed for HTA also will help it focus on attracting visitors who are more respectful of the islands and interested in learning about Hawaiian culture, Ige said.

Luke said she was disappointed that more was not done over the past two years of COVID-19 to plan how to better manage tourism, especially with visitor arrivals recently increasing.

Restoring HTA funding is only “a partial solution,” Luke said. A broader approach needs to involve the state Department of Land and Natural Resources, which controls state parks and access to beaches, Luke said.

Just like Haena State Park on Kauai, which rebuilt after the North Shore landslides of 2018, Luke said Lanikai and Oahu’s North Shore could benefit from similar ideas to control access such as by reservations, shuttles and overall tourism management.

“That particular planning should have been happening over the last two years,” Luke said. “The governor cannot say, ‘Let’s give HTA $60 million to start doing planning now.’”

Ige said his budget proposal also would:

>> Restore job positions lost during the pandemic. “Given the improvement to the state’s fiscal position, we must replenish resources for programs providing critical state services that were decimated by budget reductions,” Ige said in his budget message. “Essential positions and funding must be restored, in addition to providing sufficient funding for increases in essential operating costs, such as utilities and insurance.”

>> The state Department of Public Safety would receive $17.6 million in restored funding for 291.5 permanent positions to bring staffing up to pre-COVID-19 levels, and $15 million to continue development of a new Oahu Community Correctional Center on the current grounds of the underutilized state Animal Quarantine Station in Halawa.

>> Some $61.8 million would be used to cover costs for the state’s Safe Travels program, Hawaii National Guard costs and other COVID19 expenditures.

Other, unspecified budget plans, Ige said, will:

>> Expand clean energy, broadband and internet access.

>> Help Hawaii’s Department of Defense plan for COVID-19 preparedness.

>> “Transition Hawaii’s health system and economy from focusing on pandemic response to embracing a new normal that carefully reopens our islands for business and social interaction.”

The state Council on Revenues is expected to make an updated economic forecast next month, which could affect Ige’s budget numbers.

Ige said that hopes of more federal funds to Hawaii are muted because of the weekend setback for President Joe Biden’s “Build Back Better” proposal, which remains stalled in the U.S. Senate.

But Hawaii’s congres­sional delegation supports Biden’s plans, and Hawaii would be poised to compete for federal grants in areas such as child care and other social programs if Build Back Better becomes reality, Ige said.