The Hawaii Legislature resumed its interrupted 2020 session on Monday laser-focused on five bills designed to help the state fill a $1 billion hole in an $8 billion budget.
While the House and Senate appear closely aligned on their financial plan, there are differences in funding requests and budget projections between the Legislature and the administration of Gov. David Ige.
The governor, for example, believes the budget hole is a half-billion dollars bigger than what the Legislature has estimated, while some of his departments want more money from the federal Coronavirus Aid, Relief, and Economic Security Act than is currently planned.
Ige is generally supportive of the Legislature handling oversight of federal relief funds.
“I felt it was important to engage the legislative process to facilitate additional discussion and transparency,” Ige said at a press conference.
But it’s the finer points that the lawmakers and Ige still need to come to terms over.
Lawmakers want the leftover from those funds, estimated at about $553 million, to go back to the state’s rainy day fund, which they are tapping to shore up the budget. Meanwhile, Ige wants that money to go toward the state’s unemployment payments, which are rapidly being drained because of the high number of unemployment claims.
As to administration concerns about accessing CARES money that will go to the state’s rainy day fund, Rep. Sylvia Luke, chair of the House Finance Committee, said the problem could be fixed by suspending any laws that would restrict that access.
Her committee’s agenda was centered on two bills: Senate Bill 75, which outlines how to spend the federal relief money, and Senate Bill 3139, a companion to the budget bill that would free up some $295 million.
Luke noted “contradictions” in written testimony and verbal communications on SB 75. She wants the governor’s office and Cabinet directors to provide answers on Tuesday — either in person in the Capitol Auditorium, where the Finance Committee is meeting, or via Zoom videoconferencing.
For example, Luke and Senate Ways and Means Committee Chair Donovan Dela Cruz planned to give the state Department of Health $500,000 in CARES money.
But in written testimony on SB 75, the DOH said that a “minimum $3,500,000 is required to meet immediate needs for disease outbreak and control; $2,500,000 is required to enhance contact tracing capacity in the near future; and $25,000,000 is strongly recommended to upgrade scientific and clinical laboratory infrastructure to address the COVID mutations and future pandemic threats.”
The Hawaii Emergency Management Agency is set to receive $100 million from CARES, but Luke said that HI-EMA Incident Commander Maj. Gen. Kenneth Hara initially wanted “significantly more” money.
The financial plan crafted by Luke and Sen. Dela Cruz said $179 million of the $862 million in CARES money given to Hawaii would go to the three neighbor island counties. (Oahu has already received its share, or $387 million.)
There’s also still confusion over how much of a deficit the state will actually be in come next fiscal year. The Legislature believes it’s $1 billion, but Ige’s administration still thinks the figure is closer to $1.5 billion.
On Monday, Luke said Ige’s Department of Budget and Finance incorrectly used economic data from University of Hawaii economist Carl Bonham which, according to Luke, “exacerbated their financial plan. And they were depending on the error that they made to come up with this scenario.”
Luke said that once Budget and Finance learned of the error, all talk of a 20% cut in state salaries ended.
“They are now reconsidering their financial plan,” she said.
But at a press conference Monday, Ige stood by the $1.5 billion deficit while also acknowledging “some accounting errors.” Dela Cruz has previously said that the administration is still factoring in millions in supplemental budget requests, which they likely are not getting this year.
Either way, neither the Legislature nor Ige will know exactly how much the state has to spend until May 28, when the Council on Revenues meets to forecast tax revenues.
In the Senate, the Ways and Means Committee under Chair Donovan Dela Cruz worked on the state budget bill (House Bill 2200), a $2.1 billion capital improvement project bill (House Bill 2725) and a bill allowing Ige to tap some federal loans (House Bill 1631) — decision making is set for Wednesday on the measures.
Lawmakers will also take up House Bill 117, which would cut planned pay raises for state executives in Ige’s administration, the state Judiciary and the Legislature. Sen. Michelle Kidani said that those deferments must always be approved together or not at all.
The state auditor also released several reports on possible impacts on state finances due to the COVID-19 pandemic.
One report found $75.4 million in special funds spread across dozens of accounts in the state that have not been used for the last five fiscal years.
Lawmakers have previously considered tapping into those unused special funds to help plug holes in the budget.
In other business, the full House of Representatives voted on dozens of bills that were in limbo because of the Legislature’s emergency recess in March after a state senator tested positive for COVID-19.
The bills included Senate Bill 2102, which would require the state’s Executive Office on Aging to ensure that programs that aid senior citizens adhere to COVID-19 emergency preparedness and control protocols.
Asked about the bills during a press conference Monday, House Speaker Scott Saiki said the bills would be taken up when the Legislature resumes its work in June. Though he noted many bills could die between now and then in favor of emergency measures.
Also on Monday, the Senate put off until June voting on more than $100 million worth of pay raises for thousands of public employees that were negotiated in 2019.
Ige on Monday also requested an additional $5.7 million for state law enforcement officers that wasn’t included in several bills for the pay raises, which all stalled when the Legislature recessed in March.
The Senate’s floor session Monday may be the first time lawmakers have met via teleconference. Sens. Stanley Chang and Russell Ruderman joined the others online, under a new rule allowing members to meet remotely.
The new rule titled “Virtual Attendance During Catastrophic Disasters” would allow senators to participate in floor sessions even if they are not in the State Capitol.
“Even an old tech dinosaur like myself has learned about GoToMeeting, Zoom, Houseparty, BlueJeans and so many other different things I thought could be a fun event or clothing apparel but are communication measures,” Kouchi said during the Senate floor session.
In the House, which has twice the number of members as the Senate, half of the representatives convened on the House chamber floor while the other half sat in the visitor gallery to honor social distancing.
Senate Majority Leader J. Kalani English said lawmakers find themselves in “a new world.”
“This new world requires some extraordinary actions and quick, decisive rules to stay ahead of times,” he said.
But the State Capitol’s technology might not have kept up with the times.
The Legislature can only broadcast two hearings at once due to limitations on streaming in the building. On Monday morning, live video of committee hearings froze occasionally, though the same broadcasts on television fared only slightly better.
English switched to video on his mobile phone to get a better connection during one press conference. In another, audio for leadership in the House kept cutting out while leadership was taking questions from reporters.
Saiki has said that the Legislature will start to look at ways to address some of those shortcomings in the future.
The Legislature is expected to recess sometime next week.
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