A key state lawmaker is warning that Gov. David Ige is moving too slowly on the pandemic relief programs the Legislature authorized earlier this month.
House Finance Chairwoman Sylvia Luke said it may be difficult for the state bureaucracy to suddenly stand up complicated initiatives such as proposed new subsidy programs for needy homeowners, renters and child care providers in time to meet a deadline at the end of this year. She said the state needs to get moving.
Luke said state department heads told her that they have been instructed to wait until Ige makes a final decision on Senate Bill 126, which includes $366 million in appropriations to provide housing, food and other aid to Hawaii residents suffering from the economic fallout from COVID-19.
Ige said Wednesday he has told his department heads to plan the new programs and take steps such as drafting solicitations for proposals from contractors who want to provide the goods or services that are called for in the bill.
But he said he instructed the departments not to enter into any new contracts yet for those relief initiatives because the bill is still undergoing legal review. He said the Legislature’s plan to spend that money might not be a done deal.
Among other things, the bill calls for the Hawaii Housing Finance and Development Corporation to launch a new program to pay $500 per month up to a cap of $2,500 to support lower-income renters and homeowners who lost work during the pandemic.
Kent Miyasaki, HHFDC spokesman, said the agency plans to contract out that initiative, and has already released a solicitation to determine which nonprofits might be interested in running the housing assistance program.
SB 126 also instructs the state Department of Human Services to develop a program to hand out a total of $15 million in grants to help licensed child care providers to stay in business, and calls for the state Department of Defense to use $100 million to buy and distribute protective gear such as masks and gloves to hospitals, child care facilities, elderly care facilities, businesses, nonprofits and schools.
It is critically important that the state move quickly to spend those funds, which were provided to the state under the federal CARES Act. If any of that money is not spent by the end of the calendar year, it must be returned to the federal government.
One of the factors Ige is considering is whether the U.S. Congress is likely to provide any additional money to help the states to balance their budgets.
The CARES Act that Congress passed last spring provided the state with nearly $863 million in federal funds for coronavirus relief — including the money that the Legislature appropriated this month for relief programs — but the act prohibited states from using that money to balance their budgets.
Hawaii has been clobbered by sharp reductions in tax collections during the pandemic, and is now struggling with a $2.3 billion budget shortfall. Both Republican and Democratic governors across the country have been urging Congress and President Trump to provide more money to help states such as Hawaii.
But another possibility is that Congress will relax the restrictions on the use of the CARES Act funding, and will allow states to use money from the act to cover their operating costs, Ige said.
“I’m trying to decide and use the funds in the best way possible,” Ige said.
If Congress won’t provide any new funding to the states but instead allows states to use CARES funding to balance their budgets, “you know we would spend that money in a very different way than has been programmed by the Legislature at this point in time,” Ige said. “All of those things are in motion.
“Certainly we know that without additional federal support, you know labor savings and labor action will be required in order for us to keep our budget going and keep our state activity going,” Ige said Wednesday.
Ige first proposed pay cuts or furloughs for Hawaii public workers in April as a way to balance the budget during the pandemic, but later backpedaled, saying those pay cuts were not immediately needed.
However, he warned earlier this month that unless Congress and President Trump provide additional help to the states, public worker pay cuts or furloughs are inevitable.
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