House and Senate lawmakers reached an agreement Thursday to finalize the overall state budget, including $160.5 million for the Hawaii State Hospital, $17 million for Hawaiian Home Lands and $81 million to more aggressively pay down unfunded liabilities for health benefits promised to public workers.
The $13.7 billion spending plan for fiscal 2017, which starts July 1, is just over $100 million less than what Gov. David Ige had requested. But it’s still millions more than the state is taking in.
The budget bill unanimously cleared the conference committee, chaired by House Finance Chair Sylvia Luke and Senate Ways and Means Chair Jill Tokuda. It now heads to the floor of each chamber for final approval in the coming days.
Lawmakers had hoped to close the budget Wednesday after a week and a half of negotiations. But Sen. Donovan Dela Cruz, who was in charge of the $1 billion spending plan for capital improvement projects, held it up to secure funding for Wahiawa General Hospital, according to sources close to the deliberations.
The hospital, which serves a rural area in central and north Oahu, is in danger of going under. Doctors, patients and residents have been wearing “Save Our Hospital” shirts to legislative hearings and have been rallying since last month to put pressure on lawmakers to help.
The budget bill provides a cash infusion of $2.5 million to help the financially strapped hospital stay afloat and $700,000 for the Wahiawa Center for Community Health. The hospital had sought $3 million, Luke said.
“It was something we had to take care of,” she said. But Luke added that she does not want it to set a precedent.
Lawmakers who represent Wahiawa, including Dela Cruz and Rep. Marcus Oshiro, have been lobbying for the past month to get the state to address the hospital’s financial crisis.
Luke said the hospital must develop a long-term plan to become financially sustainable. She said the emergency room should remain open, and long-term care beds are needed.
One of the larger items that was hanging in the balance was the Department of Health’s request of $160.5 million for a new patient care facility at the Hawaii State Hospital in Kaneohe, which is in Tokuda’s district.
State Health Director Dr. Virginia Pressler said the money is crucial to keep the project moving quickly and avoid delays. To demonstrate the progress, last month at a legislative hearing on the budget she brought the sign from the Goddard Building that’s being demolished to make room for the new facility.
Tokuda said she and Luke intend to apply “much pressure” on the department to ensure Goddard is demolished soon and the new facility is built quickly, smartly and efficiently.
If not, Luke said, perhaps only half joking, they will take the money back next year.
The hospital is chronically overcrowded with court-ordered patients. Pressler has said a new state-of-the-art forensic facility not only will open up more space and improve care, but the design will have improved lines of sight to help eliminate violence that has been occurring involving patients and staff members.
“This is a significant investment in the health, safety and wellness of the patients who live there, the employees who work there, and the surrounding community who live, learn and play right next door, “ Tokuda said in a statement.
“To be able to rebuild this facility and commit to maintaining it the way it should have been cared for, goes a long way in providing and comprehensively providing, mental health services for our people,” she said.
In another big-ticket item, lawmakers agreed to provide roughly half of what Ige had wanted to pay down the unfunded liabilities in healthcare benefits promised to thousands of retired public workers.
The governor had asked the Legislature to start paying 100 percent of the required annual contribution of Other Post-Employment Benefits, referred to as OPEB. He has said spending more now would generate greater savings later.
Tokuda and Luke agreed to provide $82 million for 2017, which still takes the state up to 80 percent of the required annual contribution from 60 percent. They each said they understand the potential of long-term savings by paying it down sooner, but Tokuda said that needs to be balanced against the “unintended consequences” that could arise by forcing state agencies like the Hawaii Health Systems Corporation to meet the mandate sooner.
Hawaiian Home Lands Funding
The committee agreed to fund $17 million, the same amount Ige requested, to reimburse the Department of Hawaiian Home Lands for operating and administrative expenses this fiscal year, which ends June 30.
Luke said she expects the department to use the funds to “appropriately and properly serve the beneficiaries.”
It’s the most the state has ever provided the historically underfunded agency, but it’s still short of the $28 million that the department — and a judge — have said is needed. The $17 million includes $9.6 million already appropriated for the current fiscal year.
One of the department’s main goals is to help Native Hawaiians acquire homestead lands. The waiting list is now 27,700 people long. It was 5,700 when the mandate was enacted in 1978.
First Circuit Judge Jeannette Castagnetti ruled in November in Nelson v. Hawaiian Homes Commission that the state must fulfill its constitutional duty to make “sufficient” sums available to the department for its administrative and operating budget.
The judge decided not to order the governor and Legislature to pay a specific amount, after concerns arose about the separation of powers. But Castagnetti said last month that there is “substantial evidence” in the trial record to support the court’s factual findings that “sufficient” means at least $28 million.
Rep. Gene Ward sent House Speaker Joe Souki a letter Thursday warning him that “timing is of the essence,” and that a contempt-of-court lawsuit would be forthcoming if the full $28 million was not appropriated by the end of session May 5.
Among many other budget items, University of Hawaii officials were holding their breath for $3 million to cover an Athletics Department deficit.
Lawmakers had considered using money from the tourism fund, but instead carved it out of the general fund.
Grants And Construction Projects
The budget conference committee also announced the final list of grants-in-aid recipients for 2017, which amounts to $20 million in funding for capital improvement projects and $10 million for operating costs for various proposals from nonprofits and community groups.
Rep. Ty Cullen handled grant requests on the House side, and Tokuda and Dela Cruz split the duty on the Senate side.
Among the list of projects: $1.5 million for a new facility for the Blood Bank of Hawaii; $1 million for a Korean Cultural Center; $350,000 for a spay-neuter clinic for Hawaiian Humane Society; and $800,000 for an emergency electrical generator system for Kuakini Medical Center.
The budget included a total appropriation of $1.16 billion for construction projects funded by general obligation bonds and $2.68 billion for the biennium for projects funded by all other means of financing.
Aside from money for the State Hospital, lawmakers approved $35 million for a new Life Sciences building at the University of Hawaii Manoa, $35 million for a new Creative Media Facility at University of Hawaii West Oahu, $94 million for correctional centers statewide, $10 million for improvements at Aloha Stadium, $37.5 million for a new high school in Kihei and $12 million for a new classroom building at Campbell High School.
There are still numerous bills with financial implications that lawmakers have yet to decide. The deadline is Friday for House-Senate conference committees to reach an agreement on the legislation in time for it to pass the full Legislature next week.
Those bills include funding for air-conditioning and other heat-abatement measures to cool down public-school classrooms, and to put money into the state’s rainy day fund — each of those being $100 million requests from the governor.
The governor’s budget had initially proposed spending $488 million more than the state is expected to take in next year. The final version of the budget trimmed that deficit by roughly $100 million, but the state is still dependent on an $828 million carryover balance from 2015 to make the budget balance.
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