Gov. Josh Green has pumped up his state spending request for the next two fiscal years by almost $2.5 billion, updating a plan released in December that was largely prepared by his predecessor.

Green’s revised budget proposal reflects, and adds details to, some spending priorities he highlighted in his State of the State speech, delivered in January. It’s based on Department of Budget and Finance estimates that would maintain the state’s roughly $2 billion current financial surplus at about the same level through June 30, 2025.

“The state is in a strong financial position, and we need to act now to provide the relief that many people in Hawaii need,” Green said in a statement announcing his updated spending plan last week. “These budget requests in combination with my legislative proposals will immediately and directly help families, reduce the cost of living, provide essential healthcare services, and protect our climate and future of Hawaii.”

The biggest new item in the governor’s budget plan, which is subject to amendment and approval by the Legislature, is $900 million to finance private development of affordable housing through the Hawaii Housing Finance and Development Corp.

Green’s plan would contribute $450 million in each of the next two years to a pair of funds the agency uses to help finance low- and moderate-income housing, including rentals and for-sale units.

Lawmakers in 2022 appropriated a record $300 million to one of the two HHFDC funds, a rental housing revolving fund that in recent years had been receiving $25 million to $50 million except for a then-record $200 million contribution in 2018.

In a message to the Legislature explaining his new spending requests, Green said, “Our greatest ongoing challenge is the lack of affordable housing, which is the biggest factor affecting Hawaii’s cost of living. The state’s housing crisis has widespread impact, affecting our ability to deal with urgent issues such as homelessness, the cost of living, and workforce shortages.”

Other new spending items related to housing in the updated budget proposal include $10 million in affordable-housing grant money for the city in the 2024 fiscal year that begins July 1, $40 million in each of the next two fiscal years for the Department of Hawaiian Home Lands to repair and maintain infrastructure, and $10 million in each of the next two fiscal years for the Hawaii Public Housing Authority to repair and maintain public housing projects.

Outside of housing, big items in the plan include $100 million to combat climate change, $78 million over two years for preschool expansion, $45 million over two years to increase Medi­c­aid reimbursements and $36 million to improve the state’s unemployment insurance system.

Total state government funding is broken down generally between operating uses and capital improvement projects that include construction.

Green’s initial budget plan from two months ago included $1.4 billion in proposed spending increases over the prior biennial budget, and would have elevated general fund expenditures for operations to $9.8 billion in the 2024 fiscal year and $9.6 billion in the 2025 fiscal year.

Capital improvement project spending before the latest additions totaled $2.1 billion in fiscal year 2024 and $1.4 billion in fiscal year 2025, including $620 million using general funds and $820 million using general obligation bonds.

This initial spending plan from Green included only a few large high-priority requests inserted by the new governor, who was elected Nov. 8.

The biggest request by Green in that initial plan was putting $500 million into the state’s emergency budget reserve, or “rainy day” fund, to bring its balance up to nearly $1.5 billion after a $500 million deposit appropriated in 2022.

All of Green’s latest proposed budget additions add up to $1.4 billion over the two-year period for operations using general fund revenue from taxpayers, and nearly $450 million for capital improvement projects mainly using general obligation bonds.

Operations and capital improvements funded by other sources including federal funds bring the grand total of additional proposed spending to about $2.5 billion when compared with what Green submitted in December.

House Speaker Scott Saiki (D, Ala Moana-Kakaako- Downtown) said many of the governor’s requests align with House priorities, especially for affordable housing, climate change, medical care and homelessness.

“We will work with the governor to clarify his specific proposals over the next few weeks,” Saiki said in an email. “We hope to use the budget surplus to fund many unmet needs identified by the governor and the House.”

Jacob Aki, director of communications for the Senate, deferred comment on the additional budget requests because many are still being reviewed.