State lawmakers, initially signaled that there would be cash to spare for their annual budget-making exercise, now find themselves instead in frustrating if familiar territory: choosing the winners and losers in the battle for taxpayer dollars.
The Hawaii State Legislature convened with its annual midweek opening festivities but now has to buckle down and work. The future of funding Honolulu’s fiscally hobbled rail project sits on top of the legislative in-box.
Ultimately, its primary revenue source, the general excise tax (GET) surcharge, will need to be extended further to complete construction — a heavy lift.
But that’s only where the drama begins. There will be more issues, fraught with emotion, to navigate — a renewed fight over medical aid in dying among them. And they must confront newly clarified and unpleasant fiscal realities.
The first is that revenues haven’t grown as fast as Gov. David Ige had hoped: up 0.6 percent, compared to an anticipated 5.5 percent increase.
The second blow struck in the new year, when the public workers’ pension fund, long below what’s needed to cover liabilities, fell an additional $3.7 billion short.
The third perennial hurdle is to deal with expected requests for raises from unions representing those workers who are still in active duty.
Squaring up the revenues and expenditures lines on the budget will take up much of the oxygen in both Capitol chambers. And then they face a task loathed by politicians: voting for what essentially is a tax increase.
The Honolulu Authority for Rapid Transportation and Mayor Kirk Caldwell will be called in, front and center, to outline the path they’ve charted toward completing the 20-mile elevated rail system.
The revenue anticipated from the half-percent GET surcharge, which already has been extended once to 2027, falls billions short of what will be needed to complete the line as promised, from East Kapolei to Ala Moana Center.
The GET remains the most effective, efficient way to garner revenues from all who will use, or otherwise benefit from, the rail: tourists and Oahu commuters primarily.
That said, lawmakers are owed a plainspoken explanation from city officials about how they’ve planned to maximize alternative revenue streams for the project. For example, they could outline how developers profiting on the line can be part of the fiscal solution, through impact fees or other contributions.
State Rep. Joe Souki, speaker of the House, has laid down his parameters for approval, and has made it plain it’s not going to be a free ride. Nobody likes to see a supplicant standing before them, hands out, without offering any ideas on how to help themselves. That includes legislators, who will be looking at Caldwell expectantly, and rightly so.
On the Senate side, the call for fiscal review also is being heard. The Senate leadership, in its general legislative program blueprint for the session, has pledged to perform financial analysis of existing state tax credits, exemptions and exclusions. Those often are meant to serve a limited purpose, and it’s a good idea to assess periodically whether such inducements have worn out their welcome.
The overcrowding of prisons and jails, a perennial problem, must be addressed again this session, settling plans for replacing the Oahu Community Correctional Center. Also, the Senate has vowed to “explore alternatives to incarceration” — the Hawaii criminal justice agencies need to get on board with this.
Finally, two explosive topics of the past — medical aid in dying, and managing pesticides in agriculture — will need to be confronted again. Neither conflict-ridden issue will be easily settled, but the time to publicly engage on them is now.
The Legislature’s in session. Get ready for a rough ride.