Housing, homelessness and cost of living were top priorities in the new governor’s first State of the State address to lawmakers.

Gov. Josh Green on Monday outlined an ambitious spending plan for the coming year that aims to put $1 billion toward building more affordable housing in Hawaii.

Before a crowd of legislators and government dignitaries gathered in the House chamber, Green used his first State of the State speech to detail broad solutions for some of Hawaii’s most intractable problems, including breaking down silos in government and uniting the state. The speech was met with general approval from state lawmakers, who said they would back at least some parts of Green’s housing plans.

In one example of how the new governor plans to tackle issues head on, Green took the unprecedented step of signing an emergency proclamation on homelessness in the middle of his speech.

“You know me, business as usual won’t work anymore,” Green said. “There’s simply too much on the line to accept the status quo. Each day without action means another family is forced to leave for the mainland, another child is sleeping on the street, another local business closes, or another precious natural resource is put at risk.”

Gov. Josh Green outlined his priorities for housing, tax relief and other issues in his first State of the State speech on Monday. (David Croxford/Civil Beat/2023)

The price tag for Green’s big ticket items to tackle some of those issues totals close to $1.9 billion. In the last few weeks, Green has pledged to commit $500 million to the state’s rainy day fund, $100 million to a climate change fund, and on Monday proposed a tax relief package totaling about $312 million along with an additional $1 billion for housing.

The biggest chunk of that $1 billion would go to two funds overseen by the Hawaii Housing Finance and Development Corp.

Under Green’s proposal, $400 million would be deposited into the state’s rental housing trust fund to develop rental units, while another $500 million would go to the dwelling unit revolving fund, which is used to pay for infrastructure improvements for developers who agree to build affordable housing units within the state’s guidelines, according to Nani Medeiros, Green’s housing director.

“We hope that providing some of that infrastructure ourselves and paying for it, we bring down the cost of housing,” Medeiros said.

Medeiros also said that the state plans to increase funds for rental assistance from $1 million to $12 million.

Under the $1 billion housing plan, the state would also create a rental deposit loan program targeted at residents earning between 80% and 120% of area median income, a range of about $73,000 to $95,000. The program would help residents pay for the first-month’s rent and security deposit required by landlords.

House lawmakers signaled support for more funding for housing. On opening day, House Majority Leader Nadine Nakamura proposed committing $300 million to the rental housing trust fund.

Last year, legislators also dedicated close to $1 billion for housing, including $600 million to the state Department of Hawaiian Home Lands to reduce a waitlist of beneficiaries and $300 million to HHFDC for rental projects.

HomeAid Hawaii Opens Doors at Kama’okū during opening ceremonies and blessing held on site.
Gov. Josh Green is proposing opening 12 new tiny home villages statewide for homeless people. (Cory Lum/Civil Beat/2021)

Spending on housing initiatives has been bolstered by a surprising influx of revenue for the state. Former Gov. David Ige left office with $2.6 billion to spend, the largest surplus in state history.

But lawmakers say they still want to see more details on Green’s spending plans before committing to funding all of them.

“We’re going to have to look at the details on all these things as they roll out. I think it’s a good idea to be bold, as the governor said, but I think the devil’s always in the details,” House Finance Chairman Kyle Yamashita said during a press conference following Green’s speech.

Senate Vice President Michelle Kidani also said the Senate needs to look at Green’s entire spending plan as well as the Senate’s spending priorities.

“We really have to look at the total package,” she said.

Green also proposed building 12 new villages made up of tiny homes across the state to serve homeless communities.

James Koshiba, Green’s homelessness coordinator, estimates that each village could house between 100 and 150 people.

To speed up development of those tiny homes, Green signed an emergency proclamation suspending numerous laws related to historic preservation, procurement, collective bargaining and land use. A second, more expansive emergency proclamation is expected sometime in February that could clear the way for large developments and single family homes, Green said.

Lawmakers gave the governor a standing ovation as he signed the measure.

Medeiros said the details of the next emergency proclamation are still being finalized, and that the proclamation is meant to target affordable housing projects seeking approval under the state’s 201H process, which helps to fast track housing development. She said the laws suspended under the next emergency proclamation should be similar to those suspended under the current order.

Affordability and Oversight

Green’s tax relief package is expected to cost about $312 million and includes increases to the state’s earned income tax credit, adjustments to personal exemption and new tax credits for child- and eldercare. Green said the proposals could help all taxpayers and not just those with lower incomes.

“For simplicity, it will look like one extra paycheck a year,” the governor said at a press conference following the speech.

During his speech, Green also reiterated his support for recommendations from the Commission to Improve Standards of Conduct, which the House created last year following the announcement of corruption charges being filed against two former lawmakers.

“When it comes to governance, sunlight, open windows, and plenty of fresh air are the best disinfectants,” Green said, later adding that government records should be “easily accessible and virtually cost-free to obtain.”

Last year, the Legislature passed a measure that would have greatly reduced the cost of government records, but that bill was vetoed by the Ige over concerns that broad and vague records requests could overburden government agencies.

Green also promised tight oversight of the Navy’s defueling of the Red Hill fuel facility, which leaked fuel into Oahu’s drinking water in late 2021. He said he was also dissatisfied with the Navy’s responses to questions during a community meeting last week.

Green said he’d tackle that issue the same way he helped to handle Covid-19 in Hawaii by getting information quickly to residents.

“Forgive me, but get used to some more white boards,” Green said.

Cabinet Appointments

Both the governor and Senate President Ron Kouchi alluded to some potential trouble brewing for several of Green’s cabinet nominees.

Green took some time toward the end of his speech to thank his nominees and ask the Senate to support their confirmations. During his speech, Green essentially asked lawmakers to not allow nominees to “become collateral damage in political disputes.”

“Chronic conflict and dysfunction among branches of government is not good for any of us, especially when it doesn’t serve the interest of the people,” Green said.

While Green and lawmakers may be on the same page for now, the governor and Senate President Ron Kouchi alluded to some conflict over cabinet appointments. (David Croxford/Civil Beat/2023)

The governor’s department directors are wrapping up what have been two weeks of difficult budget hearings, particularly those in the Senate, where some nominees struggled to answer questions from panels of senators.

“The jury is still out in how all of the cabinet members have been currently performing when they appear in front of the committees,” Kouchi said. “Some of the cabinet members have not been able to clearly articulate a vision and a plan.”

DHHL Chair Ikaika Anderson and his staff initially stumbled through a hearing without providing much detail on the department’s plans for spending the $600 million it got last year. Anderson later returned with more details after meeting with the Hawaiian Homes Commission.

In a separate hearing, Board of Land and Natural Resources Chairwoman Dawn Chang was also hard pressed to provide details on Green’s $100 million proposal for a climate change fund. At one point, Chang left the meeting to get briefed by Green before returning to the hearing room.

In another episode in the Senate Ways and Means Committee, Chairman Sen. Donovan Dela Cruz recessed a hearing for the Department of Agriculture after its new director, Sharon Hurd, failed to immediately provide details on agriculture programs.

Kouchi said several cabinet members have been asked to come back to better articulate their plans.

“If they can do that, you don’t endanger yourself, you help yourself,” Kouchi said.

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