On Politics: Rosier economic outlook means more revenues, which means more spending by legislators

The Hawaii Legislature’s major work product of the year, the state budget, is expected to clear the House this week and zip over to the Senate. Call it a gigantic bounty of good news.

After suffering one of the nation’s most significant budget setbacks as the COVID-induced recession stopped tourist traffic to the islands, legislators are releasing the budget belt more than a couple of notches.

Last week, the state’s Council on Revenues issued two reports freeing up state spending, according to state Rep. Sylvia Luke, chairwoman of the House Finance Committee.

“This year we are incorporating many spending bills into the budget,” Luke said during Thursday’s Finance Committee hearing on the budget.

The Legislature and Gov. David Ige, although both somewhat cautious about wholesale spending increases, have a difference over how to handle the state’s money surplus. Ige essentially worries that good times will end someday, so the state should tuck about a billion dollars into a “rainy day” fund. The Legislature’s Democratic majority, after years of seeing no new money, now wants to give an unqualified “yes” to more spending.

“Compared to what the governor thought at the beginning of the year, we are looking at a significant increase in revenues,” Luke said in an interview after the hearing.

“We took a look at obligations that should be addressed when we have funding, as opposed to putting obligations on the waiting list.”

It is the difference between spending it if you got it, compared to helping the people now.

The biggest item in the lawmakers’ budget is $600 million for Native Hawaiian housing projects that, according to new reports, would help address “a chronically underfunded homesteading program that has fallen short of its promise to return native people to their ancestral lands.”

“We are trying to help people, individuals who may not even have the capacity to purchase a home. Perhaps we can do rent subsidies or mortgage relief,” said Luke.

Ige has not said he was opposed to the plans for a major relief program, but wants to see how it matches up with his savings plan.

Meanwhile, the budget is expected to get more work in the Senate.

Last week the improved economy was already showing up in a budget spreading increased spending around.

Luke, who is running for lieutenant governor in this year’s election, pointed out in testimony that “For UH, we will be restoring $42 million in reductions; we are also providing $4.8 million for expansion of community colleges — we don’t want finances to be a barrier to education.”

Luke added in her interview that she doesn’t see opposition from Senate Democrats to the House plans.

In all, the new budget plans are expected to grow state spending at a time when programs to help have been dramatically cut.

Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com.