If there was any doubt that fallout from the Aug. 8 Maui wildfires is a statewide problem, it’s now dispelled, as funding begins to be reallocated away from eagerly awaited projects on Oahu and elsewhere.
The Hawaii Convention Center’s leaking roof, badly in need of repair, lost its $64 million appropriation. Improvements for state parks, which was due $25 million, will now get only $10 million. And lamentably, $45 million was chopped from a $50 million allocation for the state Department of Education to produce teacher housing.
Such are the highlights of now-shifted funds, which pre-August, held hope for advancing important projects for Hawaii’s future. Not now.
It’s becoming painfully clear that many difficult choices face the upcoming state Legislature — that many programs favorably seen in recent years as good-to-have will no longer be need-to-have.
In an Oct. 30 memo to state department heads, Gov. Josh Green exercised his emergency power to redirect $173 million from 26 projects — so far — to start covering hefty expenses from the tragic wildfires. The inferno that leveled Lahaina killed at least 100 and caused an estimated $5.6 billion in damage — destroying some 3,500 homes and businesses, leaving nearly 8,000 people displaced, with many still living in hotels.
Green called for “flexibility and adaptability” from his department heads. That, and more, will be needed to guide funding and policies in 2024.
State Budget Director Luis Salaveria told Star-Advertiser reporter Andrew Gomes that the state already faces some $100 million in accrued bills or known obligations related to the wildfires, and it’s uncertain how much higher such expenses will grow.
Many other unknowns abound, such as how Hawaii’s economy will rebound this holiday season and into next year, which will help determine the Council on Revenues’ next state revenue forecast due out Jan. 10, a week before the Legislature convenes. More consumer spending and overall tax take would help the state’s situation, of course, and enable more robust funding of state programs as well as nongovernmental community ones.
The council’s forecast also will inform another huge unknown: how deeply legislators will dip into the state’s $1.3 billion emergency reserve, aka the “rainy day” fund. It was just last session that $500 million was added into the fund in the fiscal year ending June 30 — pre-Maui wildfires.
Also anxiously awaited is Green’s supplemental budget request to the Legislature, expected in mid-December, which will give more clarity on proposed funding changes and priorities.
One major aspect to watch is what and how much the state’s housing-related agencies will be seeking: The Hawaii Housing and Finance Development Corp. (HHFDC) will be particularly vital in seeding urgently needed new low-income rental housing for Maui’s displaced; the state’s Dwelling Unit Revolving Fund (DURF), too, must be fully utilized and possibly expanded.
Even before the wildfires, it was estimated that Hawaii needs 50,000 new homes between 2020 and 2025 to meet demand — but over the last five years, added only 27,000. Further, it’s shameful to realize that despite high prices, not only has Hawaii housing not grown significantly in recent years, but Maui and Kauai are actually losing existing housing stock, according to a June analysis by the University of Hawaii Economic Research Organization, likely due to out-of-state owners leaving units vacant and converting housing to vacation rentals. Clearly, new policies must target, and reverse, this unacceptable trend — on Maui and statewide.
Also to watch is how much the state will put into the new $150 million fire victim compensation fund announced by Green on Nov. 8. Hawaiian Electric has committed up to $75 million, but other wildfire lawsuit defendants — the state, Maui County and Kamehameha Schools — have yet to pledge their amounts.
Maui wildfire recovery will dominate decisions as lawmakers balance funding priorities — but it cannot be allowed to be all-consuming. So many other priorities statewide must be addressed outside of Maui — from housing and homelessness, to student education and support, to development and land-use policies.
For instance, fixing the Hawaii Convention Center’s leaking roof, long deferred, must remain on track. Despite the project’s $64 million defunding, the needed work could and should proceed using bond funding, with legislators’ approval.
Still, it’s hard to forget Green’s Oct. 30 ominous memo to his department heads: “As we navigate these uncharted waters, bear in mind that the recovery process will be long and costly. … Hence, departments must continue to be prudent with their expenditures.”
This from a governor who swept into office in 2022 amid a hefty state surplus. Tragedy has suddenly turned the heady times into somber, austere ones. The recalibration of statewide needs, programs and projects has begun. Maui will be the tip of the spear in determining next year’s legislative and administrative spending policies, but it cannot deflect needed action on other important priorities for the entire state.