State agencies will lose funding for vacant positions and other unused monies under a new draft of the state’s operating budget, which won preliminary approval by a Senate panel Wednesday.

House Bill 2200, the budget bill, is just one piece of a package of bills the Legislature plans to approve to plug a $1 billion hole in the state’s $8 billion general fund budget.

The new budget cuts about $357 million in either unspent funds or funding for positions that have not been filled by state agencies. The bill is pared with others still pending in the state House of Representatives which would also move $270 million into bond financing and also tap another $25 million in Medicaid reimbursements.

State lawmakers have advanced new drafts of the state budget. Cory Lum/Civil Beat/2020

“We are shoring up the largest budget deficit in the history of the state of Hawaii,” Senate Ways and Means Committee Chair Donovan Dela Cruz said during a hearing.

“We have a budget that avoids furloughs and cuts we believe would exacerbate our already fragile economy,” he continued.

The new draft of the budget also does not include any of Gov. David Ige’s $429 million in supplemental budget requests.

Lawmakers plan to tap $359 million in the state’s rainy day fund to plug the budget hole.

Dela Cruz told the other senators that there could still be changes to the budget in June, when the Legislature plans to reconvene again. Those changes would take into consideration revenue projections anticipated at a May 28 Council on Revenues meeting.

The Ways and Means Committee also passed a new state capital improvement plan with about $2 billion worth of bond financing. The total two-year capital improvements budget is about $5 billion.

Some highlights of that budget include:

  • $100 million to widen Farrington Highway near Kapolei
  • $3 million for a long-term care facility for veterans
  • $34 million for Hawaiian Home Lands
  • $17 million for state tech upgrades
  • $153 million for various Department of Education improvements
  • Over $43 million for gender equity projects at schools statewide
  • $571 million for airport improvements
  • $45 million for the Hawaii Health Systems Corp.

The committee also passed HB 1631, which would allow Ige to tap into $2.1 billion worth of federal loans to have cash on hand in case of further budget crisis.

All three bills must still pass a final vote by the 25-member Senate and get approval from the House.

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