Lawmakers are worried about the potential impact from federal budget cuts.
House lawmakers want to bank $200 million in state funds as a cash cushion to help cope with any federal budget cuts or other fiscal problems that may crop up in the years ahead.
The House Finance Committee, in passing a budget Wednesday, made public some highlights from its proposed spending plan for the next two years, which would authorize slightly more than $20.48 billion next fiscal year and $20.22 billion the following year.
That is slightly less than the spending plan proposed by Gov. Josh Green in December, but House Finance Chair Kyle Yamashita cautioned those budget numbers may change as the House and Senate negotiate over the details.
Yamashita said the proposed $200 million set-aside “is just to send a clear message that the House believes that in light of the current situation — and we don’t know what the out years will be — it would be wise for the state to tuck away some money.”

The $200 million would be deposited in the state’s Emergency and Budget Reserve Fund, better known as the state’s “rainy day fund.” That fund now has about $1.56 billion.
Lawmakers have been eying the turmoil in the opening weeks of President Donald Trump’s administration, and are concerned that federal budget cuts may force state government to step in to fund essential services such as health care for the poor.
“Ultimately, Hawaii’s exposure or requirement for additional funding will be directly affected by actions taken by Congress and President Trump,” Yamashita said in a written statement after the hearing, “particularly if they decide to cut Medicaid; reduce SNAP benefits; or decrease Title I funding for schools in lower-income areas.”
“The $200 million we allocated in the state budget will not be enough to cover everything, but it will serve as a contingency if we need to pull that lever,” he wrote. “We must balance our immediate needs with the responsibility to be prepared as much as we can for the uncertainty stemming from turmoil in Washington, DC.”
The House draft of the state budget also includes nearly $6 billion in construction spending over the next two years, including $408 million for affordable housing and infrastructure such as sewer and water systems and roadways.
The state Department of Education would receive $480 million of that money for school construction and maintenance, while $50 million would be earmarked for repair and maintenance of the Hawaiʻi Convention Center on Oʻahu.
The proposed House construction budget also includes $30 million for planning, design and procurement to select a developer to build a new jail to replace the run-down Oʻahu Community Correctional Center. The state hopes to enter into a public-private partnership to get the developer to finance and build a new 1,300-bed facility.
The new jail is expected to cost on the order of $1 billion, and critics of the project say the state should instead focus on diverting people away from OCCC who don’t need to to be there, such as homeless and mentally ill prisoners.
The House version of the budget also includes $40 million for “critical repairs at the Hawaiʻi State Hospital campus,” where leaks and mold have become a huge problem in the Hale Hoʻōla Building for patients who are sent to the hospital by the court system.
There’s also $1.78 billion in state and federal funding for airport construction, and $1.5 billion for highway construction statewide.
The House Finance Committee voted unanimously Wednesday to approve the budget provisions in House Bill 300, which now advances to the full House for a floor vote. The proposed budget will then move to the Senate for further consideration.
See highlights from the operating and capital improvement budgets below.
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About the Author
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Kevin Dayton is a reporter for Civil Beat. You can reach him by email at kdayton@civilbeat.org.