Gov. David Ige will introduce a bill next year to help kick-start the recovery effort in Lower Puna in the wake of this year’s Kilauea lava flow, but that measure will be a more modest package of assistance than Hawaii County officials have been seeking.

Ige said in an interview last week he also plans to release another $10 million in state funds to Hawaii County to help cover its operating costs. The Ige administration already released $12 million in state funds to help Mayor Harry Kim’s administration cover its near-term expenses while it copes with the lava flow and flooding.

The volcanic eruption that began May 3 covered more than 6,000 acres of land in Lower Puna with lava, destroying more than 700 homes in the Leilani Estates and Kapoho areas, and burying or blocking access to more than 1,600 acres of farmland.

That destruction devalued land and reduced property tax collections just as the county faced the extra costs of responding to the lava hazard and sheltering people who had been driven from their homes.

The Kim administration has proposed an enormous lava recovery package of improvements with a price tag that has been a moving target, with estimates ranging from $550 million a few months ago to $854 million last month.

Kim has said he believes only about $100 million of that would be the state’s share, and the county would ask that the rest be funded by federal government. But state lawmakers are not rushing to embrace the county package.

House lawmakers declined county requests to hold a special session this fall to approve elements of the package. Instead, they urged the county to “refine its recovery plans to identify specific needs,” work with the governor to identify short-term funding and work with the federal delegation to apply for federal disaster relief, according to a House statement.

House Majority Leader Della Belatti said in a written statement last month that “the ongoing dialogue (with the county) has been productive, but many of the legislative proposals and funding requests need further discussion.”

According to House lawmakers, the county estimated the overall recovery needs are $854 million, which includes emergency response operational support through 2023, infrastructure projects, recovery planning and implementation studies.

Versions of the recovery plan made public earlier this year included nearly $200 million to buy property or compensate landowners in the most risky areas that are classified as Lava Zone 1. Early drafts of the plan also included housing assistance of $160 million or more to develop a new subdivision on vacant state land in the Keonepoko area of Puna.

Kim and Ige are continuing to work with the federal government to try to secure funds for long-term community development to help people who live in the most risky areas to relocate, but the administration bill for next session will be crafted to address more short-term needs, Ige said.

The bill would include funding for assistance in rebuilding public infrastructure such as roads, much of which may be later reimbursed by the Federal Emergency Management Agency, Ige said.

As for the longer-term effort, Ige said the state and county still need to grapple with the issue of how to reduce the risk of widespread damage from the next eruption.

“We are still working with the community, kind of working through what and where do they want to be,” Ige said. “You know the people who choose to live in Puna choose to live in Puna, and they don’t want to be in Hilo and they don’t want to be closer to Hilo.”

“They choose to be out there, they know they’re in a rift zone, and so I think that we would want to move away from development in that Lava Zone 1 and 2 just because of the risk involved, but it’s got to be a decision that the residents (who are) impacted make, and trying to find that balance.”

Another tricky issue is what to do about property that is intact but isolated because the roads have been blocked by lava.

“The property exists but is inaccessible,” Ige said. “Do we actually try and dig out from that? Do we leave it alone and move people or suggest that they move out of that area? … It’s all of those kinds of tough old questions, about how much of that do we invest in clearing and restoring highways and roadways that have been run over by lava, and how much do we invest in really trying to establish new pathways and new communities.”

Yet another issue that could surface is the future of the Hawaii Property Insurance Association, a program created by the state in 1991 to provide insurance in Lava Zones 1 and 2 when no other insurer will write policies in those areas. Those are the two highest-risk zones.

HPIA insured 167 homes in Leilani Estates, Kapoho and Vacationland, and as of mid-July the program had received more than 130 claims that were expected to top $20 million, according to a statement from HPIA. Ige said the state is comfortable that HPIA has the reinsurance and reserves it needs to cover the losses.

He acknowledged the argument that the state initiative making insurance available in those high-risk areas actually might encourage people to build there.

“The challenge is, the genie is out of the bottle,” Ige said. “The County of Hawaii has made the decision that they’re going to allow these developments in these high-risk lava zones for relatively inexpensive properties.”

“I think that we need to be able to provide those residents support for allowing that to occur,” Ige said. “At the same time, I think the mayor and I agree that we would want to try and move new home-building or replacement home-building outside of Lava Zone 1 and 2 so at least the state and the county’s efforts can be geared toward something that would have less risk than really being right on that ridge line, right in that East Rift Zone.”