We blew it when we came back into session. We needlessly left many residents and local businesses to sink further into insolvency, we’re prolonging economic pain, and we’re making our recovery slower.

Federal Reserve chairs, Treasury secretaries, most economists and studies of the 2009 recession agree: In economic recessions, governments that spend money to help people avoid bankruptcy, help businesses stay open, and keep people housed, have faster recoveries with less debt. Governments that do not prolong the damage and end up deeper in debt.

In two months, over 225,000 Hawaii residents filed for unemployment. About 100,000 of them have yet to get a dime. The director says the backlog will go into June.

Three months with no income, many losing health insurance in the middle of a pandemic.

The Hawaii Legislature reconvened on May 11 but with COVID-19 restrictions that prevented the public and media from entering the building. As it wraps up business for now, a state senator says lawmakers could have done far more to help those most in need because of the pandemic.

Twenty-four percent of local businesses surveyed say they will not survive without help. Most didn’t get federal Paycheck Protection Program loans; those that did can only use a fraction on rent or costs to revamp operations to meet social distancing.

The state has money to help now. The feds gave us $1.25 billion with only two strings attached: Spend it on COVID-19 response (not budget shortfalls); and, spend it by Dec. 31. Honolulu received its share directly; the state got nearly $900 million.

Governor Ige should have sent the neighbor island counties their share and helped people stuck in the state unemployment mess. But when he didn’t, the Legislature chose to assert our control over the money.

‘Not One Dime’

So, what did we do when we came back into session this week?

We identified over $2 billion in the state budget that could be used for budget shortfalls and emergency needs: $900 million of federal COVID-19 money, about $700 million in cuts and transfers, and nearly $400 million in savings.

Then we did three things with that money:

  • We earmarked $1 billion for budget shortfalls in 2020 and 2021 to avoid furloughs and cuts;
  • We gave neighbor islands their share of COVID relief and a bit for state COVID response; and
  • We put about $650 million COVID relief into the rainy day fund, where the governor can’t touch it.

Not one dime for people waiting on unemployment. Not one dime for local businesses inching closer to shutting forever.

Our plan: We will recess today, go home, and think over what to do.

We’re pretty sure we’ll come back in mid-June.

I am utterly mystified at the lack of urgency.

The money committee chairs said it’s unfortunate I’m not looking at the whole CARES Act funding; they gave some to the neighbor islands, and the state must take care of hospitals and food stamps.

I am looking at the whole federal funding. In addition to the $1.25 billion in CARES Relief, the state also got hundreds of millions more to help hospitals and schools. Food stamps are federal money. The whole federal package makes the state more able than the counties to provide direct assistance to residents and businesses.

The counties can’t make the level of government investment needed with what we gave them. They got tens and twenties, while we banked nearly two thousand, plus several hundred more earmarked for state services.

The state must put some skin in the game. That includes help for people and businesses on Oahu, because its economy subsidizes the other counties.

Other states are putting skin into their games, so we have models to follow:

  • Montana — $133 million in emergency grants for small businesses to adapt; senior care homes to keep kupuna connected; emergency housing, food and childcare;
  • New Hampshire — $490 million small business relief; early childcare and family support; food bank; non-profits for social services;
  • Ohio — $174 million to expand SNAP (food stamps), food banks and school food programs;
  • Vermont — $300 million for economic relief for local businesses;
  • North Carolina — $125 million for small business loan program;
  • Alaska — $290 million for small business relief grants.

I proposed zero-interest loans for people waiting on unemployment insurance — $600 a week, provided they sign an agreement that once approved, the state would repay itself first. As the repayments came in, we could put those funds elsewhere to help.

That was shot down.

Last week we found out the state was getting yet another $50 million of federal money. I proposed we put $30 million with non-profit partners to distribute emergency grants for people waiting on unemployment, or who could return to work but needed childcare or kupuna care.

Again, no.

The state must put some skin in the game.

The House Finance Committee chair stated we needed to bank money because we’re about to run out of unemployment funds.

We are not about to run out of unemployment funds.

We’ve received a $1.3 billion, interest-free line of credit from the Unemployment Trust Fund. The Legislature is passing another bill encouraging the governor to take out interest free loans, so we’re obviously not against borrowing money.

The Legislature blew it this week by not putting some of our emergency response funds into programs to directly help newly unemployed and local businesses.

I’m speaking out now in the hopes that more people will do the same, so that when we come back in June, we don’t blow it again.

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