A legal backlog has been cleared by the new administration of Gov. Josh Green to release nearly $50 million in state funding to nonprofit groups — an announcement made Monday as Green unveiled a budget that would add nearly $1.4 billion in spending for improving education, health care and easing homelessness.
At a news conference on his first budget, Green also proposed adding an additional $500 million to the state’s rainy day fund, bringing the total to $1.9 billion by the end of the 2023 fiscal year when federal COVID-era funding disappears.
The long-delayed release of so-called grants-in-aid came from a more liberal interpretation of disbursement rules by new state Attorney General Anne Lopez, which represents a more urgent approach by Green compared to former Gov. David Ige.
Lopez said the Ige administration took “a very conservative, narrow interpretation” of grants-in-aid spending.
“I’m very aggressive about these sort of things,” Green said. “I just didn’t want to wait any longer.”
Barely two weeks into his new administration, Green said, “We’re going to try to be very proactive. I can’t say we’re going to always get it right.”
Politicians running for office in nearly every race this year promised to do more to develop affordable housing and help Hawaii’s working families, so Green is unlikely to face broad philosophical disagreements from the incoming Legislature, but may be challenged on the amount of specific spending.
Green said he is willing to take the lead on eliminating “dysfunctional” building regulations that prohibit construction of affordable housing if that is what the Legislature needs.
Along with the need to keep workers in Hawaii, Green said that “there’s an obvious clear mandate to work on affordable housing.”
“If they (legislators) want to spend more on housing, I’m going to say yes. … If they would like me to take some executive action, I will do it … until they ensconce some policy into law.”
Green said he sees adding more affordable housing as critical to improving health care and easing life for working families across the state.
A medical doctor, he said his proposed budget represents “what our priorities are, what our values are. … We need to deal with housing. We need to deal with health care. … We’re going to care about people. That will take on a lot of shapes, but it’s going to cost money. … We have to be careful we don’t overspend.”
His goal is to make Hawaii “the health care state” and comes as Republicans take control of the U.S. House and likely will not be “as supportive of social services,” he said.
Green introduced representatives of a handful of some of the 180 or so nonprofit groups that benefited from the newly released funds, including the Blood Bank of Hawaii; Domestic Violence Action Center; After-School All-Stars, which helps schoolchildren catch up from the effects of COVID-19-era learning; and the Hawaiian Humane Society, which brought a 2-year-old orphaned dog named Sweetie who got some of Green’s attention in the governor’s ceremonial room at the state Capitol.
On command, Sweetie even stood up on her hind legs and put her front paws on Green’s desk to pose for a group photo that included two of the After-School All-Stars students.
For the budget, Green proposes increasing total state spending by 7.3% ($667 million) in fiscal year 2024, totaling $9.8 billion, and 5.2% ($472 million) in fiscal year 2025 totaling $9.6 billion.
For the fiscal biennium 2023-2025, requests for capital improvement projects add up to $2.1 billion in fiscal year 2024 and $1.4 billion in fiscal year 2025, which includes $620 million in general funds and $820 million in general obligation bond funds.
Green vowed to increase tax credits and “cut red tape to the extent we can” in order to generate a “housing boom.”
“The best thing we can do is build housing,” he said.
Green also wants to eliminate the state’s general excise tax on food and medicine for low-income residents “who are really struggling.” A new climate impact fee would be imposed on tourists with dual goals of generating $350 million to $400 million in new state revenue while potentially discouraging low-spending tourists from coming to Hawaii in order to reduce the number of visitors to state beaches, parks and other attractions.
“The aina will survive, and the travelers will pay for it,” Green said.
“High priority” spending includes:
>> Adding $15 million in each fiscal year for the ‘Ohana Zones Pilot Program, which his administration said has served over 5,510 previously homeless people and moved 1,368 homeless people into permanent housing. One of his priorities as lieutenant governor, Green called the plan “a newfound commitment to seriously address homelessness.”
>> Another $10.8 million in each fiscal year for homeless services and outreach programs including Rapid Re-Housing and Housing First.
>> $10 million in fiscal year 2024 and $20 million in fiscal year 2025 for the Hawai‘i State Loan Repayment Program, which would pay off educational loans for primary care and behavioral health providers who care for patients in designated health professional shortage areas of Hawaii.
>> Adding over 60 positions and $4.4 million for nursing and medical programs across University of Hawaii campuses.
>> $5 million in fiscal year 2024 and $10 million in fiscal year 2025 to increase the reimbursement rate for Medicaid providers and which “expands access to high-quality health care and improves health outcomes for low-income families and individuals,” Green said. The current Medicaid reimbursement rate, he said, isn’t “enough to keep the doors open.” The state will spend $30 million in Medicaid but would be reimbursed $35 million in federal funds while also keeping “health care providers in the state,” Green said.
>> $50 million for Hilo Medical Center to expand its intensive care and surgical units, the first of potential state funding to expand health care offerings at neighbor island hospitals to keep patients from having to fly to Oahu. “We won’t need to transport 12 to 15 people per day,” Green said.
