It’s reassuring that the Legislature found money in the budget to put $300 million aside for the state’s emergency “rainy day” fund, and to make a $135 million appropriation for the state employees’ retirement fund. It’s wise that the state refrains from spending every dollar it has available, because a healthy reserve makes Hawaii more resilient.
The scope of an emergency can be difficult to predict, as the COVID-19 pandemic and Maui fires prove. And with a massive rebuilding and recovery effort in Lahaina pending, it’s still possible that the emergency fund appropriation will be needed in the near future.
Throughout this legislative session, uncertainty over Hawaii’s share of recovery costs after fires tore through Lahaina bubbled under the surface. Early budget asks had to be made before full information was available about federal aid or the success of private fundraising. Facing this uncertainty, Gov. Josh Green made the call on March 27 to cancel a previously approved $300 million deposit to the retirement fund.
Sen. Donovan Dela Cruz, chair of the Senate Ways and Means committee, was instrumental in diverting that $300 million to the rainy day fund, saying it was a precautionary move to give the state additional financial cushioning in case of higher-than-expected wildfire costs or another disaster. “We have to prepare as much as we can for some other type of incident down the road … a hurricane or another fire or something that we just want to make sure we are prepared for,” he said. Dela Cruz is right.
Senate conference committee chair Henry Aquino is also right in identifying the “uncertainty still in the forefront regarding Maui moving into the next fiscal year.” While the feds have allocated an enormous amount of funding in recent years for pandemic-related relief efforts, Red Hill clean-up and decommissioning and West Maui disaster response, this is an election year, and after November, the administration’s priorities could shift.
As for the state’s retirement obligations, global uncertainties must be considered that make it difficult to predict how Hawaii’s retirement trust holdings will fare in the near- and long-term. Addressing the shortfall in that fund whenever the opportunity presents itself is always prudent.
And yet: It’s still uncomfortable to learn that the Legislature felt it necessary to throttle grants to organizations and businesses supporting public purposes down to $30 million from $40 million last year. “The needs are getting greater, but this year we had a lot less money,” said Rep. Scott Nishimoto, chair of the legislative Subcommittee on Grants-in-Aid, calling it “a very tough year.”
The two largest awardees this year, at $800,000 each, are the Waianae Coast Comprehensive Health Center and Maui nursing home operator Hale Mauka Health Services. The Waianae health center had sought $2.5 million toward a $7.5 million emergency food warehouse, which would guard against a hunger emergency on the Waianae Coast if the community were cut off from outside deliveries, as West Maui was after the Lahaina fire. Hale Mauka sought $3.5 million for a 46-bed rehabilitation facility — a need that exists now.
Ideally, both of these necessary initiatives would have been fully funded — but with roughly $1 billion allocated for Maui wildfire response across the state’s budget, the legislative decision to hold back is defensible.
Partial funding may delay the final delivery of these needed services, but should allow projects to move forward in increments, as the nonprofit 442nd Legacy Center plans to do in its drive to create a museum at its headquarters in Moiliili. It’s an outcome that can be reluctantly accepted in view of the many competing needs the Legislature must balance.
