Ever the optimist, Gov. Josh Green on Wednesday announced a rosy outlook for a “strong” state budget as costs for the Aug. 8 Lahaina wildfire recovery became clearer — and even dispelled the threat of a ban on short-term rentals (STRs) in West Maui. Enough units have now been secured, he said, to house 3,100-plus evacuees still in hotels — though Green did continue urging for more STRs to become longer-term housing.

That ongoing call and fiscal clarity were welcome and necessary, even as Green does a delicate financial balancing act to ease a “worst-case scenario” of $1 billion in Maui recovery costs, broached just a month ago.

Some relief in managing expenses came on several fronts: $30 million in federal aid to cover Compact of Free Association residents; $43 million in condo eligibility coverage OK’d by the Federal Emergency Management Agency; up to $107 million for debris removal, thanks to federal coverage; and $40 million in Hawaii Community Foundation aid.

Green is asking for $297 million to build Maui temporary housing and $65 million for the “One Ohana” legal fund — but says the state budget plan is strong with a general fund carryover of $681 million to $981 million in fiscal year 2024, and $350 million to $650 million in fiscal 2025.

While the plan does leave the state’s $1.5 billion “rainy day fund” untouched, it does come at the expense of a $300 million payment to be deferred from the Hawaii Employees’ Retirement fund. Chronically underfunded — to the tune of $13.7 billion, as estimated in June 2022 — the ERS was trending in the right direction, thanks to diligent pay-ins and solid investments. Deferral of payment today, uncomfortably, could end up costing more in the future.

More encouraging in these difficult times is the state’s steadfast, multipronged plan for more-stable housing for Maui’s fire evacuees (see 808ne.ws/Mauihousing), now entering the “mid-term recovery” stage. For instance, the state just bought the Haggai Institute, formerly the Maui Sun Hotel, to convert into 175 affordable housing units for May 1 move-in; and was to break ground today for 450 interim units in the Kala‘iola community north of Lahaina, with occupancy slated for Aug. 1.

But even as these and many more necessary projects move forward, the state and county governments can no longer ignore the proverbial elephant in the room: necessary forceful actions against the many illegal STRs, in Maui and throughout the state.

The threatened West Maui STR ban has dissolved, yes, but the fact remains that vacation rentals for tourists — and the large sums they fetch — have come at the expense of enough housing that’s affordable for Hawaii’s local workforce. As Lahaina Strong activists compellingly noted Thursday at a state Capitol rally, short-term rentals have “run rampant” north of Lahaina, where a stunning 87% of the housing consists of STRs.

The tragic Maui wildfires exposed the STR-vs.-housing dilemma in the most stark terms. Maui has an estimated total of 31,000 STRs, legal and illegal; statewide, Green estimated, some 75,000 of Hawaii’s 89,000 vacation rentals are illegal.

That’s why the governor’s pledge of increased enforcement on illegal and noncompliant STRs must be more than lip service. The public will be watching for noticeable results from a new attorney general’s task force to crack down on illegal rentals.

Of course, state legislators need to do their part by toughening laws, including:

>> Senate Bill 2919, which explicitly grants counties the ability to control STRs.

>> House Bill 1838, enabling counties to enact zoning rules to phase out nonconforming STRs over a “reasonable period of time.”

Slogging through Maui fire recovery will be painful and pricey. State and county leaders must move with clear-eyed strategies to rebuild Lahaina and lift up its devastated families. And as the dust clears, literally, and renewal begins, policymakers also must support residents statewide, with long-overdue actions against illegal STRs.