A billion dollar drop in tax collections prompts Gov. Josh Green to prioritize homeless initiatives, affordable housing, health care and environment in the state budget.

In an unusual move, Hawaii Gov. Josh Green on Wednesday used his line-item veto power to reject a $50 million appropriation for proposed emergency and cybersecurity facilities in Mililani.

It was part of more than $1 billion in cuts to the state’s biennial general fund budget due to a slowing economy.

Funding to relocate the Hawaii Emergency Management Agency and the Kalanimoku Data Center to the proposed First Responders Technology Campus had been inserted into the state budget by Senate Ways and Means Chair Donovan Dela Cruz.

The projects, he and supporters contend, are essential for public safety, though they have their strong detractors, too.

Governor Josh Green line-item veto budget Director Finance Luis Salaveria
Gov. Josh Green, left, listens to Director of Budget and Finance Luis Salaveria answer a question during the governor’s press conference Wednesday. (Kevin Fujii/Civil Beat/2023)

But, citing a constitutional requirement to balance the budget, Green killed the $50 million expenditure along with $12 million for a new state Department of Defense headquarters and $5 million for a new training center for the state Department of Law Enforcement. He also slashed from $5 million to $1 million the money to help the Department of Accounting and General Services plan for relocation of the data center.

All told, the cuts amounted to $71 million, said Director of Budget and Finance Luis Salaveria. All of the allocations were favored by Dela Cruz as part of House Bill 300, which funds operations and capital improvement projects of executive branch agencies and programs for the next two fiscal years that begin July 1. 

At a press conference at the Capitol Wednesday, the governor acknowledged that using his line-item veto power to bring the budget into the black so soon after the Legislature passed the budget was unusual. Typically, governors instead choose to restrict the distribution of funds over time as revenue projections fluctuate.

But Green said that a new Council on Revenues projection released in May — not long after the Legislature approved the budget — showed tax collections were declining significantly, dropping the general fund projection from 2% growth in May to minus 1%. That changed the general fund total from $21.7 billion to $20.6 billion.

“First and foremost, we want to honor our priorities as colleagues, which is housing, homelessness, health care — services that we have to have,” Green said. “And that’s the first and foremost thing that you’ll see. We are keeping operations going completely. We’re making sure workers are whole and services are whole.”

Governor Josh Green line-item veto budget Director Finance Luis Salaveria
Gov. Josh Green explains the reasons for about $1 billion in budget cuts over the next two years. (Kevin Fujii/Civil Beat/2023)

In all, Green issued 22 line-item vetoes. The largest cuts include shrinking spending on teacher housing for the Department of Education from $170 million to $50 million, and from $93.8 million to $5 million for water and irrigation infrastructure for the Department of Business, Economic Development and Tourism.

House Finance Committee Chair Kyle Yamashita said at a press conference afterwards that it was understandable for the governor to suggest cuts, given the changing revenue picture. He declined to say whether there were any specific fund reductions that concerned him and his colleagues, however, and said that it was too soon to say whether there might be an attempt to override any of them.

“I think we would have to evaluate in totality,” he told reporters. “I think we want to kind of look at the big picture and then meet with the leadership at the caucus. And of course, we have to get agreement with the Senate.”

Dela Cruz released a statement that said, “The challenge we face with crafting the State budget is that it’s built upon ‘point-in-time’ revenue projections. That put the governor in a difficult position, requiring him to make tough fiscal calls on what can stay in the budget and what will need to wait and be worked on next session.”

As for the first responders campus, Dela Cruz said he had met with the governor over the weekend. The plan is to work over the interim on ways to modernize the state’s emergency response facilities.

“He assured me he is committed to finding alternatives to address the challenges,” Dela Cruz said, adding one idea might be to work with the administration “on determining if the land in the Mililani Technology Park should pivot and be used for in-door farming, ag-tech, and value-added food production.”

Governor Wants ‘Clarity’ On Tech Park

It is not a complete surprise that the governor might want to make budget adjustments. The rushed finalizing of the state budget in the last hours of the 2023 legislative session drew the ire of many House members, who complained that the process was neither fair nor transparent.

Asked about the hasty process, Green said he had preferred that lawmakers extended session or hold a special session to give them more time. But he said he believes the budget was overall a solid product that served Hawaii and its people well.

Green said that he also recognizes the need to ensure emergency services and data security, but he said he wants to see more “clarity” in what is proposed for the First Responders Technology Campus, which he called “a tech park,” and why it is so necessary. He noted, for instance, the reluctance of the Honolulu Police Department to fully relocate its operations to the planned facility.

The governor also expects to direct more money to organizations that were shorted in HB 300. He said he would use “the lion’s share” of the $200 million lawmakers authorized the governor to use at his discretion to fund the Hawaii Tourism Authority, the Department of Education and the University of Hawaii.

The DOE would directly receive $55 million while UH would get $25 million. The figure for HTA was not stated but has perviously been reported to be around $60 million.

Separate from the line-item vetoes, the governor has until June 26 to inform the Legislature what bills he is thinking of vetoing, and until July 11 to deliver the veto, sign the bills or let them become law without his signature.

Lawmakers then have the option to come back into a brief override session.

Though he is of the same Democratic Party and it takes a two-thirds majority in both houses, the Legislature in early May overrode a veto of a measure intended to clarify the time requirements of lawsuits against developers from condominium associations. Green said he was concerned the bill could have “unintended consequence” of increasing housing costs.

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