New data released Wednesday by Gov. David Ige’s administration shows the state and the three neighbor island counties together have spent only about 8% of the federal CARES Act funding that the governor’s office received in April.
The money is supposed to help state and local government to cope with the coronavirus pandemic. All of that funding — $862.8 million as of Aug. 30 — must be spent by the end of this year or it will have to be returned to the federal government. But so far, only $71 million has been spent.
The state and counties have allocated $541.8 million, meaning they have plans for how to spend at least that much. But that still leaves a huge chunk that the administration has yet to figure out what to do with — let alone actually spend the money.
Hawaii nonprofits and social service agencies as well as state lawmakers and business leaders have been urging the Ige administration to quickly push out more money to ensure it is not lost.
Ige has pledged that all of the CARES money will be used to help Hawaii individuals and businesses that have been hammered by the pandemic and the tourism shutdown, and will not be returned to the federal government.
But a monthly report released Wednesday by the state Department of Budget and Finance shows the state spent only 3% of its share — $23 million out of $687 million — of the CARES funding by the end of last month, leaving many hundreds of millions of dollars still unused.
Kauai, Maui and Hawaii counties have done better but not great in spending their portions. The neighbor islands have collectively spent 27% of the $175 million in CARES funds they received in June and August from the state’s share. Honolulu received its $387 million allotment directly with no pass-through from the state so is not part of the administration’s latest report.
And time is running out.
Jill Tokuda, who is co-chair of a state House subcommittee that is tracking the CARES spending, said the administration seems to be moving now with greater sense of urgency, but still has an enormous task ahead of it.
“Given the rate at which we’re going to need to spend down the remaining funds by the end of the year, we really need to be focused on being much more expedient and efficient in how we’re going to get through these funds and get them to people who need them,” Tokuda said.
Of the nearly $863 million in CARES Act the administration received in April, state lawmakers earmarked $366.5 million for state departments to spend on a variety of initiatives such as airport screening, purchase of personal protective equipment and new relief programs such as emergency pandemic assistance for tenants, homeowners and landlords. However, only $23 million of the money the Legislature appropriated has actually been spent, according to the report.
And the Ige administration has not said publicly how it intends to use $320 million that has yet to be allocated.
The largest chunk of CARES funding the state did manage to spend is $20 million that is listed as expended by the Department of Business, Economic Development and Tourism. The Hawaii Housing Finance & Development Corp., which is under DBEDT, is responsible for the housing assistance initiative.
Ige has said he deliberately delayed spending some of the CARES funding because he needed to know whether Congress and President Trump would pass a new pandemic relief bill, or whether states and municipalities would be allowed to use CARES funds to shore up their budgets.
State government has been coping with a combined $2.3 billion budget shortfall for last year and this year, and Ige has said public worker pay cuts or furloughs are inevitable unless the state gets more aid from the federal government, or is given greater flexibility to use CARES Act funding to backfill the budget hole.
House Finance Committee Chairwoman Sylvia Luke said Wednesday it is now pretty clear the Democrats and Republicans in Congress are deadlocked, and won’t provide additional aid in the near future.
The delay in spending the federal funds this year means the Ige administration will now need help moving the CARES funds before the end of the year, and Luke said House and Senate lawmakers volunteered themselves and their staffs to help do the necessary “legwork” to spend the federal money and meet all of the CARES requirements.
“It’s kind of an unusual move only because these are the duties of the admin, but this is a crisis, and the admin simply doesn’t have enough bodies and resources to take care of all the things that need to be done,” Luke said. “A lot of it is just paperwork and making sure invoices are done and making sure that all the allocations and all the things that are purchased or expended meet the CARES requirements.
“It’s already September, and I know a lot of people are frustrated and asking the Legislature to take aggressive action, but right now is really not that time,” she said. “This time really is for us to figure out how we can work together, and if that means if I have to go dig up that invoice and then manually file it in a workable way that will be presented to the federal government, that is what we are planning to do.”
Senate President Ron Kouchi said some of the delays in spending the federal money were understandable, but “from the beginning we’re just disappointed that we could not get the help to people faster.”
“With the level of impact that the community has faced, there’s no way we could have gotten it to them fast enough — the level of help they needed was so significant,” he said, adding that there are legal requirements need to be followed.
Kouchi said Ige has delayed using $230 million that state lawmakers set aside to boost unemployment benefits for Hawaii workers because the state was taking advantage of a program launched by President Trump to provide an extra $300 per week in federal unemployment benefits.
That six-week federal program will expire this week, and the $230 million in CARES Act money that lawmakers earmarked for extra unemployment benefits “hopefully will get deployed and give assistance to those who are unemployed,” Kouchi said, adding that “would get out almost half of the money.”
The $230 million that lawmakers appropriated for extra jobless benefits will provide an additional $100 per week per person.
Kouchi added: “Some of the expenditures simply aren’t there because of the backed-up supply chain.” Orders of personal protective equipment, computers for schools and equipment for wireless hotspots for students have not yet been filled, and the state therefore has not yet made payment, he said.
“Hawaii being small, the size of our order compared to other jurisdictions, we don’t have that volume,” Kouchi said.
Lawmakers have been tracking spending of the CARES Act funding, but Kouchi said he does not believe there is a serious risk that any of the money will lapse.
If the state cannot distribute the money in any other way, lawmakers directed the administration to deposit any unused CARES funds into the state unemployment trust fund in December so the money can be paid out in unemployment benefits.
“So, we’re not sending any of the money back,” Kouchi said.
The Hawaii Working Families Coalition on Tuesday sent Ige a petition with more than 1,000 signatures urging the governor to push the federal funds out into the community.
“The assistance provided by the state and counties thus far has kept many of our residents afloat but
there are still unmet needs, ” the coalition wrote in a letter to Ige. “With job loss, the adoption of distance learning, and immigrants being left out of federal aid packages, targeted assistance will be key to prevent additional suffering.”
The coalition of community organizations noted that as of Tuesday the state had only 107 days left to spend the CARES money. “Putting the money into families’ hands instead of a trust fund benefits our local businesses and can help sustain our economy,” they wrote.
Among other proposals, the group urged Ige to fund the extra unemployment benefits that lawmakers approved in July, allocate $65 million for health insurance subsidies and community health centers, and provide $15 million for food banks and other food assistance.
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