WASHINGTON — Hawaii is poised to receive nearly $2 billion as part of the latest round of federal coronavirus relief aid, but it’s already clear it won’t stave off future financial pain.

The island economy was among the hardest hit in the U.S. in large part because of strict travel restrictions that effectively shut down tourism, which is the state’s biggest industry.

Hawaii Gov. David Ige acknowledged that while the relief package helps, it won’t be enough to save government workers from summertime furloughs due to what’s estimated to be a $1.4 billion budget shortfall for each of the next four years.

“The new federal funding is welcome, but it’s not sufficient to cover the state’s projected revenue gap,” Ige said in a statement to Civil Beat.

“It did provide support that allowed us to delay furloughs, but we still need to get direct aid to state and local governments in order to avoid significant program cuts and the impacts that would have on state services and employees.”

Hawaii is expected to receive another financial boost from the recent federal relief bill signed by President Trump earlier this week. Some of the money is expected to help with vaccine distribution. Courtesy: Hawaii Health Department

The $900 billion relief bill that was signed into law by President Donald Trump last week is the second largest in U.S. history, yet it is still less than half of the $2.6 trillion Congress approved in March through the CARES Act.

Democrats in the House passed a $3 trillion relief bill, dubbed the HEROES Act, in May, but Republicans, including President Donald Trump and Senate Majority Leader Mitch McConnell balked at the price tag as well as other provisions, including those that gave direct aid to state, local and tribal governments.

Hawaii Congressman Ed Case called the lack of local funding one of the most glaring omissions of the new relief package and said Washington needs to immediately start working on a third round of stimulus, saying $900 billion is too little given the magnitude of the pandemic.

“It’s not enough,” Case said. “It’s not going to be enough for Hawaii. It’s not going to be enough for the country.

Hawaii Sen. Brian Schatz, who sits on the Senate Appropriations Committee, was just as blunt.

“More relief will be necessary,” he said. “We now have a pretty clear record of putting together these deals on a bipartisan basis and it remains to be seen whether that bipartisanship will continue.”

When the deal was cut, Schatz’s office released an analysis of the legislation that estimated Hawaii could expect to receive at least $1.7 billion of the $900 billion, but he expects that number to be even higher.

The largest share of the $1.7 billion — about $700 million — is expected to go directly to Hawaii residents who are eligible for $600 direct cash payments while another $400 billion is estimated to be split between extended unemployment benefits and rental assistance. Hawaii schools will also receive an estimated $200 million, some of which is dedicated to Native Hawaiian education.

The legislation sets aside $35 million for Hawaii to help with coronavirus vaccine distribution, but Schatz said there’s another pot of money that can be used to help the state navigate the logistical challenges of actually delivering the vaccine around the islands. The state will also receive an additional $150 million for testing and contact tracing.

One of the biggest unknowns at this point is how much money will come to the state via the Paycheck Protection Program for small businesses.

The new relief bill pumped another $284 billion into the PPP, which provides forgivable loans to companies with fewer than 500 employees. Hawaii businesses took advantage of the program after the CARES Act passed and secured more than 25,000 small business loans worth nearly $2.5 billion.

Overall, the state has cleared more than $10.6 billion in relief aid not including the latest legislation.

“We all worked very hard for that result,” Case said. “If we don’t work just as hard all over again then we’re going to leave dollars on the table that are desperately needed throughout Hawaii.” 

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