Near-term state costs for Maui wildfire response and recovery work are exceeding recent expectations and have led to an emergency funding request at the Legislature.

Earlier this month the state Department of Budget and Finance informed some Hawaii lawmakers that $199 million available to cover such costs through the current fiscal year ending June 30 won’t be sufficient.

But how much money is needed in both the near term and longer term remains unclear, and that has created an extra challenge for the Legislature to pass an updated budget by May for the state’s fiscal biennium that began July 1 and runs to June 30, 2025.

“I think we’re at code red,” said state Sen. Donovan Dela Cruz, chair of the Senate Committee on Ways and Means deeply involved in budget work. “There are a lot of unknown costs without an end in sight.”

In an effort to get a better view of how much such funding may be needed, the committee is holding a briefing today at 9:30 a.m. to hear from state administrators and representatives from the Federal Emergency Management Agency, Maui County and the American Red Cross.

Dela Cruz and state Sen. Sharon Moriwaki, the committee’s vice chair, informed other committee members in a Friday memo that cost uncertainties are largely over short- and long-term housing expenses, including instances where FEMA won’t pay for a fire survivor’s housing for various reasons under eligibility rules that in some instances are being appealed by the state.

The Aug. 8 Maui wildfires destroyed the homes of about 3,500 households, mostly in Lahaina plus several in Upcountry Maui. Survivors are temporarily being housed largely in hotels and residential properties mostly on Maui. The fire in Lahaina also killed at least 101 people.

Dela Cruz (D, Mililani- Wahiawa-Whitmore Village) and Moriwaki (D, Waikiki- Ala Moana-Kakaako) said in the memo that the state is incurring a $1 million-a-day expense to cover noncongregate shelter costs for fire survivors being excluded from FEMA coverage.

This state expense, according to the memo, is for sheltering roughly 1,000 households at $1,000 a day per household.

At $30 million a month, this cost alone can eat deeply into state finances and might lead to spending cutbacks for departments, depletion of reserves and less funding for other budget requests.

“The State’s financial commitment to the Lahaina recovery has been substantial in both direct services, support, and upfront FEMA reimbursable costs,” the memo said. “However, as the appropriating body, we are constitutionally bound to ensure that we pass out a fiscally sound budget for the biennium. Understanding the State’s fiscal commitments is critical to ensuring that the State provides both for the people of Maui and retains core services and operations statewide in areas like public education, healthcare, and protecting our natural resources.”

To provide extra funding and a clearer funding picture for the state’s Maui wildfire costs, two bills at the Legislature are being considered.

One measure, Senate Bill 582, was introduced in 2023 as a blank placeholder bill pertaining to the budget and now is being used to propose an emergency budget appropriation sought by Gov. Josh Green.

The Ways and Means Committee amended the blank bill Wednesday to instead appropriate an unspecified sum to cover immediate Maui wildfire expenses for the fiscal year ending June 30 because such costs are expected to exceed the $199 million currently in the state’s major disaster fund.

This $199 million includes $164 million that Green redirected from past appropriations for other things, and at the beginning of this year had been expected by Budget and Finance officials to be enough to cover Maui wildfire costs through June 30.

“The State is working to maximize FEMA reimbursements, however, issues have arisen over what costs are FEMA eligible, and the timeline in which the State will be reimbursed for eligible costs is currently not clear,” the agency said Feb. 9 in written testimony on another bill. “What is clear is that the State will require additional funds to cover these immediate expenses in FY 24.”

Appropriating money for the following fiscal year ending June 30, 2025, to cover the state’s Maui wildfire costs is included in the state’s main supplemental budget bill, House Bill 1800, as well as in a separate bill sought by the governor, SB 3068.

Requested funding in SB 3068 includes $452 million for state response to the Maui wildfires and statewide wildfire mitigation and response.

The Ways and Means Committee has scheduled public hearings on SB 582 and SB 3068 for 9:30 a.m. Wednesday.