Lawmakers have proposed axing millions of dollars in requests by state agencies to use federal relief funds under a bill that could win approval in the Legislature early next week.

Many of the requests were either duplicative or the agencies could find money from other funds, House Finance Chairwoman Sylvia Luke said.

Senate Bill 75 creates a plan to dole out $862 million in federal relief funds to various state agencies. It’s been a priority bill for the Legislature, which reconvened this week to figure out what to do with the relief funds as well as how to plug a $1 billion hole in the state budget.

While the counties will still get their requested money from the bill, the departments of health and defense saw some of their requests dropped from the version of the bill the House Finance Committee approved Friday.

Legislators axed a $10 million request from Alan Oshima, the governor’s lead person on economic recovery. Oshima’s office asked for about $9 million for consultants over the course of the year, as well as $500,000 for staff salaries. 

Alan Oshima Hawaii Economic Community Recovery Resiliency Navigator.
A request by Alan Oshima, appointed by Gov. David Ige to lead the state’s economic recovery effort, for $9 million in consultant services was cut from a draft of Senate Bill 75. Cory Lum/Civil Beat/2020

Luke said that request won’t be considered because of concerns that both her committee as well as a panel of senators had about the office’s use of outside consultants. 

“Many of the members believe economic recovery needs to happen,” Luke told reporters. “We’re not clear if this is the right approach.”

Oshima has previously said that about $4.5 million would go to Boston Consulting Group and other local consultants to put together Hawaii’s recovery plan. Oshima told senators on Thursday that BCG is putting together drafts of those plans.

A company spokeswoman said BCG does not discuss details about work for its clients.

Budget documents describing the consultants’ work shows the work includes an economic and industry analysis, as well as development scenarios for reopening the economy.

Lawmakers will have further discussion with Gov. David Ige on how they can support reopening the economy. 

Sen. Donovan Dela Cruz said some senators still want to see the state Department of Business, Economic Development and Tourism play a larger role in reopening Hawaii. The department has sub-agencies that could be assisting with diversifying the economy, Dela Cruz said.

He said that a new investigative committee set up by the Senate will keep an eye on what consultants produce for Oshima’s office.

Cuts In Health, Defense Departments’ Request

The new draft of SB 75 also reduces the state Department of Defense’s request from $100 million to $40 million. Much of the request was for buying more personal protection gear for medical facilities, but Luke said there wasn’t a lot of demand for the equipment.

She also wants the defense department to seek other sources of money first.

The Department of Health also won’t get some of its budget request in light of receiving $50 million in federal aid Wednesday for COVID-19 contact tracing, testing, improvements to their laboratories and other needs.

Under SB 75, $36 million would instead go to thermal screening systems at airports in the state. The remaining $14 million could be used for contact tracing and other efforts by DOH.

Some of those funds were axed because lawmakers couldn’t see how they fit into the state’s recovery plans, Dela Cruz said.

Part of that plan, a color-coded graph showing the level of threat from COVID-19 and appropriate responses, will also be put off because the legislators did not approve a draft plan put together by the Hawaii Emergency Management Agency and other agencies.

Luke said the chart, which she and Dela Cruz showed to reporters on a press call, did not clearly communicate how the state should be shifting between different threat levels.

The plan is still being worked on, the governor’s office said, but there’s no timeline for when it might be finished.

A draft of the state’s threat level plan wasn’t sufficient or clear enough for lawmakers. 

Other departments are still getting their budget requests.

The state Department of Human Services will receive $2 million for upgrades to its computer system that could allow for more people to apply for the Supplemental Nutrition Assistance Program.

About $635 million of the unused federal relief funds will be deposited into the state’s rainy day fund for use later. Ige has called for those funds to go toward making payments on unemployment claims.

The fund for unemployment claims is about halfway depleted, Luke said.

She said it’s still a possibility that the $635 million could eventually go to unemployment payments. But she wants to put it in the rainy day fund in case other emergencies pop up between now and June, when the Legislature is expected to meet again.

The Department of Labor and Industrial relations would also get funds for improving its IT system, as well as extra staff.

Neighbor Islands Getting Relief

Neighbor island counties would also get a significant chunk of federal relief dollars.

A total of $175 million will be going to the counties of Kauai, Maui and Hawaii for coronavirus relief programs. State lawmakers are hoping that some of that money could go to rental relief programs or food assistance, similar to programs in place on Oahu.

“We are asking the counties for their kokua in sharing the burden of the state,” Luke said at Friday’s hearing. 

From SB 75, Kauai County is expected to get $28 million; Maui County, $66 million; and Hawaii County, $80 million. Honolulu has already received over $300 million in federal funds.

Details on how each county plans to spend those funds still need to be worked out.

Maui Mayor Mike Victorino is asking the Maui County Council to vet his proposal for Maui. About a third of those funds would go to grants for housing, small business and child care, according to a press release.

SB 75 requires that each county mayor consult with their respective county councils before making any decisions on how the money should be spent.

Luke said that the councils requested a bypass of their approval of the use of those funds. The worry was that either the mayors or the council would run out of time if they needed to run requests through their usual budget process.

Those federal relief dollars must be spent by December under rules approved by Congress.

“This is a time for them to sit down and figure out their critical needs and spend down their portion in a timely manner,” Luke said.

Earlier this week, SB 75 received written support from Kauai County Mayor Derek Kawakami, Victorino and several county council members on the neighbor islands. 

Hawaii County Mayor Harry Kim did not submit testimony to lawmakers, but a spokeswoman said Friday the county will release plans on how the money will be spent once those details become available.

SB 75 still needs to clear a final vote by the full House next week, as well as win approval by the Senate.

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