Lawmakers and Gov. David Ige like to say it is the state budget that truly reflects their priorities, and the extraordinary budget document produced by the Legislature this year suggests Hawaii’s political class finally made it a priority to deliver on some long-standing promises.

When presented at the beginning of this year with a budget surplus of more than $2 billion — the largest in state history, by far — lawmakers assembled a spending package aimed largely at the state’s lower-income families, with a particular focus on long-neglected needs and grievances in the Hawaiian community.

The budget evolved dramatically along the way, partly because more and more money became available.

Hawaii State Capitol building.
Gov. David Ige wanted to use the budget surplus to tuck away money for future emergencies, and provide a rebate to taxpayers. Lawmakers agreed to modified versions of both proposals. Cory Lum/Civil Beat/2018

Ige’s big budget proposal last December was to bank $1 billion of the surplus in the “rainy day” budget reserve fund, an idea no doubt inspired by catastrophes on his watch that included the Big Island lava flow, the Kauai flood and the Covid-19 pandemic that triggered a collapse in state tax collections.

The governor followed up on that idea in his State of the State address in January with another conservative-leaning proposal that the state distribute tax refunds of $100 for each of Hawaii’s taxpayers and their dependents.

Lawmakers initially dismissed the idea of plunking a huge sum in the rainy day fund, but money continued to gush into the general treasury. A panel of experts that projects state tax collections increased their estimates by $890 million in January, and by another $450 million in March — money that Ige hadn’t accounted for in his December budget proposal.

Game on at the Legislature. On opening day in January, House leadership announced a plan to provide $600 million to the Department of Hawaiian Home Lands in a new attempt to make good on long-deferred promises and clear-cut legal obligations to provide land and housing for Hawaiians.

That was followed by a $328 million settlement in a long-running class-action lawsuit over the state’s failure to meet its obligations to thousands of Hawaiians on the Hawaiian Homes waitlist, and a new agreement to provide the Office of Hawaiian Affairs with a larger share of the revenue from the use of lands once held by the Hawaiian kingdom.

Lawmakers also made good on long-standing pledges they made with Ige in 2020 to create a refundable earned income tax credit, increase the state minimum wage, invest more in affordable rentals, and make early education more widely available to Hawaii’s children.

Lawmakers also bought into variations on Ige’s initial budget proposals. Rather than making a $1 billion deposit into the rainy day fund, the Legislature approved a $500 million contribution to the reserves, which will bring the total in the fund to $800 million. After the session ended, Ige called that “a good investment.”

The Legislature also approved tax rebates that are a more generous version of what Ige originally proposed, and would range from $100 to $300 for all taxpayers and their dependents.

It now falls to Ige to implement that spending package in the final months of his administration.

As governor, Ige has the power to spend much of the money or withhold it as he sees fit, at least until a new governor takes his place in December. He said in an interview Friday he plans to push the Department of Hawaiian Home Lands to move quickly on spending as much as possible of the $600 million.

Here’s a look at where the money went.

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