STAND. COM. REP. NO. 3419
Honolulu, Hawaii
RE: H.B. No. 1800
H.D. 1
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Second State Legislature
Regular Session of 2024
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred H.B. No. 1800, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE STATE BUDGET,"
begs leave to report as follows:
The purpose and intent of this measure is to appropriate funds for the operating and capital improvement program costs of the executive branch for the fiscal biennium beginning July 1, 2023, and ending June 30, 2025 (FB25).
Your Committee received testimony in support of this measure from Hawai`i Early Intervention Coordinating Council; State Council on Developmental Disabilities; Executive Office on Aging; Executive Office on Early Learning; Hawaii Green Infrastructure Authority; Department of Commerce & Consumer Affairs; Mililani Mauka Elementary School; Paauilo Elementary and Intermediate; Na'alehu Elementary School; Hana High and Elementary School; Department of Budget and Finance; Department of the Attorney General; Office of the Governor; Department of Land and Natural Resources; Department of Health; Kohala Elementary School; Kohala High School; Kaumana Elementary; Office of Planning and Sustainable Development; University of Hawaii; Department of Education Central Oahu District Office; Department of Human Resources Development; Department of Hawaiian Home Lands; Kaneohe Elementary School; Department of Law Enforcement; Hawaii State Department of Education; Office of Hawaiian Affairs; Department of Business, Economic Development, and Tourism; Department of Labor and Industrial Relations; Department of Taxation; Hawaii Community Development Authority; Department of Accounting and General Services; Hawaii Housing Finance & Development Corporation; Hawaii Department of Agriculture; Waiahole Elementary School; Public Utilities Commission; Hawaii State Public Library System; Pomaikai Elementary; Hawaii Technology Development Corporation; Agribusiness Development Corporation; Hawaii Public Housing Authority; Criminal Justice Research Institute; Early Learning Board; Judiciary, State of Hawaii; State Public Charter School Commission; Board of Education; Department of Corrections and Rehabilitation; Department of Human Services; Hawaii Correctional System Oversight Commission; Hawaii Tourism Authority; Hawaii State Energy Office; Waianae High School; Department of Transportation; State of Hawaii Climate Change Mitigation and Adaptation Commission; Department of Defense; County of Kauai Office of the Prosecuting Attorney; Maui County Department of the Prosecuting Attorney; Hawai'i County Office of the Prosecuting Attorney; Board of Water Supply; HE'E Coalition; Malama Makua; Ohana Hoopakele; FAMM; Community Alliance on Prisons; Hawaii True Cost Coalition; National Association for Civilian Oversight of Law Enforcement; Prison and Jail Innovation Lab, LBJ School of Public Affairs, University of Texas; Hawaii Food Industry Association; 3D Innovations; Hawaii Hui LLC; MorphOptic, Inc.; Min Plastics & Supply, Inc.; Going Home Hawai'i; Aloha Edibles; Hawaiian Chip Company, LLC; Malie, Inc.; Hawaii Afterschool Alliance; Mana Up; Hawaii Venture Capital Association; 'Imi Ola Support Services; Hawaii Health Systems Corporation; Parents And Children Together; Guide Star Engineering LLC; Hawai'i Friends of Restorative Justice; Ai.Fish LLC; Care for Aina Now Coalition; Small Kine Farm; Ma'i Movement Hawai'i; PERIOD.; Local Food Coalition; Hawaii Fish Company Inc.; Hawaii Association for Behavior Analysis; Hawai'i Women's Coalition; Jun Innovations Inc; Healthcare Association of Hawaii; Aloha Shoyu Company, Ltd.; HNU Photonics; YWCA Oahu; Referentia Systems; North Shore Hydrological Services; Blue Startups, LLC; Hawaii Alliance for Progressive Action; Indivisible Hawaii; Indivisible Hawaii; Hawai'i Public Health Institute; Ten Tomorrow; AF3IRM Hawaii; and sixty-five individuals.
Your Committee received testimony in opposition to this measure from Reimagining Public Safety in Hawai'i Coalition; American Civil Liberties Union of Hawaii; Reimagining Public Safety; and eighteen individuals
Your Committee received comments on this measure from The Stadium Authority; Honolulu Department of the Prosecuting Attorney; Andria Tupola, Honolulu City Councilmember, District 1; Hawaii Harbors Users Group; Microsoft Corporation; Natural Energy Laboratory of Hawaii Authority; Maui Health Systems; Hawai'i Children's Action Network Speaks!; and two individuals.
PART
I. HOUSE BILL NO. 1800, HOUSE DRAFT 1
This measure, as
received, includes:
(1) The base budget from Act 164, Session Laws of Hawaii (SLH) 2023;
(2) The reduction of line-item vetoes from the base budget from Act 164, SLH 2023, pursuant to Governor's Message No. 1233;
(3) Program appropriation provisions that lapse previously appropriated general funds from Act 164, SLH 2023, and other bills with appropriations; and
(4) The changes incorporated in House Bill No. 1800, House Draft 1 (H.B. No. 1800, H.D. 1), including salary adjustments to appropriate full-year funding for new and vacant positions.
Your Committee finds that, according
to Department of Human Resources Development (DHRD), the overall timeline of
the recruitment process takes an average of about seven months to one year. According to the Report to the 2024
Legislature as required by Act 57, SLH 2019, DHRD averages about five hundred
open recruitments on any given day. Recognizing
the challenges to establish and fill positions expeditiously, Finance
Memorandum No. 22-11, dated September 23, 2022, stated that "new
positions shall be funded for a maximum of six months for the first year then
for the full year thereafter". As
such, Finance Memorandum No. 23-12, dated September 5, 2023, includes a request
category for full-year funding. This
means a request to provide full-year funding for half-year funded positions. While filling vacancies to deliver core
services and programs is important for the people of the Hawaii, your Committee
disagrees with H.B. No. 1800, H.D. 1 to appropriate full-year funding for all new positions. There are more pressing and immediate needs
such as Maui recovery efforts and continuation and restoration of safety net
programs across the State.
Your Committee finds
that section 5 of H.B. No. 1800, H.D. 1 details program appropriation
provisions that lapse previously appropriated general funds from Act 164, SLH
2023, and other general fund appropriations in other Acts from 2022 and 2023. In total, section 5 of H.B. No. 1800, H.D. 1
proposes to lapse a total of $153,091,433 in general funds, which includes:
(1) An aggregate total of $51,567,433 in fiscal year beginning July 1, 2023, and ending June 30, 2024 (FY24) from Act 154, SLH 2023, for various programs and services, including:
(A) $500,000 for the Festival of Pacific Arts and Culture;
(B) $5,250,000 for the Small Business Credit Initiative;
(C) $5,000,000 for an affordable rental housing construction incentive program;
(D) $3,600,000 for a shoreline project along Kamehameha Highway in the vicinity of Kaaawa Elementary school;
(E) $9,000,000 for the Mauna Kea Stewardship Oversight Authority;
(F) $2,940,000 for King Kalakaua Building roofing project; and
(G) $25,277,433 for the Department of Budget and Finance;
(2) $60,000,000 in fiscal year beginning on July 1, 2022, and ending on June 30, 2023 (FY23) from Act 248, SLH 2022, for repairs and maintenance projects in the Department of Education;
(3) $4,524,000 in FY24 from Act 95, SLH 2023, for a supportive housing pilot program in the Statewide Office on Homelessness and Housing Solutions;
(4) $1,500,000 in FY24 from Act 97, SLH 2023, for affordable housing under the Hawaii Community Development Authority; and
(5) $5,000,000 in FY24 from Act 218, SLH 2023, for irrigation infrastructure to support farmers by the Department of Agriculture.
Your Committee finds
that, in consultation with each of the impacted departments, there are plans to
encumber and/or spend $112,351,754 out of the proposed $153,091,433 general
fund lapses, leaving $40,739,679 of funds that can realistically be lapsed. The proposed lapses for these funds that have
been committed, at best, would be rendered ineffective and the funds would not
lapse, but, at worst, would force the departments to suspend activities,
terminate the impacted projects, and forfeit extramural matching funds up to
$42,000,000. As such, the subject forced
lapses are a disservice to the planning and commitments behind each affected
project, program, and the people who supported them.
Your Committee has
identified the following changes that were incorporated in the House Draft that
negatively impact the safety, financial sustainability, and prosperity of the
State:
(1) A general fund appropriation of $1,051,100,000 for wildfire response and recovery efforts to the Department of Budget and Finance;
(2) A special fund ceiling reduction of $49,500,000 from $49,500,000 to $0 for operations and development of the Aloha Stadium;
(3) A series of adjustments to provide guard services for the Capitol District, including:
(A) A general fund appropriation of $5,481,362 to the Department of Accounting and General Services;
(B) A general fund reduction of $1,129,242 from state retirement benefits; and
(C) A general fund reduction of $1,752,120 from General Administration from the Department of Law Enforcement;
(4) A general fund reduction of $1,484,052 from $2,456,750 to $972,698 for the Victim Witness Protection and Career Criminal Prosecution Programs;
(5) A general fund reduction of $1,319,999 from $1,320,000 to $1 for Homeless Programs Office contract increases;
(6) A general fund reduction of $13,199,999 from $20,000,000 to $6,800,001 for psychiatric in-patient services;
(7) A special fund ceiling reduction of $800,000 from $800,000 to $0 for sport fishing;
(8) A special fund ceiling reduction of $900,000 from $900,000 to $0 for roadside safety maintenance; and
(9) A special fund ceiling reduction of $300,000 from $300,000 to $0 for County of Hawaii Highway police services.
(10) A general fund reduction from $5,000,000 to $0 for debris removal services for State highways;
Your Committee received testimony from
the impacted departments that details some of the negative impacts of each of
the aforementioned adjustments incorporated into H.B. No. 1800, H.D. 1.
Your Committee finds
that the $1,051,100,000 general fund appropriation does not provide resources
that address the needs of Maui survivors in timely matter, according to funding
requests from the Administration through Governor's Messages and bills. For example, GM4 requested $297,000,000 in
FY24. Moreover, the $1,051,100,000
general fund appropriation reflects a lack of transparency on how the funds
align with state and county housing and recovery plans for Maui survivors. Therefore, your Committee has appropriated the
funds for Maui wildfire recovery efforts requested by the Administration in
House Bill No. 679, House Bill No. 2610, Senate Bill No. 582, and Senate Bill
No. 3068 to increase public transparency. These stand-alone bills provide clear
legislative direction, while allowing public participation, on the budget
preparation and execution process.
Your Committee received testimony
from the Department of Business, Economic Development, and Tourism, as well as
the Stadium Authority, stating that without the special fund ceiling increase
of $49,500,000, the long-term sustainability of the New Aloha Stadium
Entertainment District (NASED) could be compromised. Your Committee notes that the subject
appropriation would have no negative financial impact on the general fund or
Stadium Development Special Fund. The
subject appropriation would allow the Stadium Authority to expend funds
appropriated and deposited into the special fund pursuant to Act 248, SLH 2022.
The NASED aligns with the Halawa Area
Transit-Oriented Development Plan. The
plan envisions the stadium site to develop a mix of affordable housing,
commercial, office, entertainment, and cultural uses. On December 14, 2023, the Request for
Proposals for the NASED was published to select a master developer to master
plan and deliver NASED as an integrated public-private partnership. On March 28, 2024, the State announced that
two priority-listed offerors were selected to proceed to the Proposals Phase. Therefore, your Committee recommends
supporting the current procurement process by adding the requested $49,500,000
special fund ceiling increase for NASED.
Your Committee received testimony
from the Department of Law Enforcement (DLE) requesting a direct appropriation
to DLE for security and monitoring contracts for the Capitol District, which
would remove the unnecessary transfer of funds between DLE and the Department
of Accounting and General Services (DAGS). According to the DLE, DAGS requested DLE to
assume responsibility of security and monitoring contracts for the Capitol
District. As such, your Committee finds
that appropriating the funding for these services to DAGS instead of DLE, as in
the House Draft, does not align with this DAGS-DLE agreement. Furthermore, the House Draft reduces funds
from the base of the Retirement Benefits – State (BUF741) within the Department
of Budget and Finance and General Administration from DLE (LAW900). Your Committee finds that both reductions
would have detrimental and significant negative effects to the departments. Therefore, your Committee recommends
supporting the DLE, DAGS, and the Department of Budget and Finance by adding
the requested $2,600,000 general funds to DLE for the continuation of security
services.
Your Committee
received testimony to restore the proposed reduction of $736,785 for the Victim
Witness Program and $747,267 for the Career Criminal Prosecution Program,
including from the Department of the Prosecuting Attorney of the City and
County of Honolulu, a Honolulu City Council Member, and Mothers Against Drunk
Driving Hawaii. Your Committee notes that the subject
reduction totaling $1,484,052 specifically targets the Prosecuting Attorney of
the City and County of Honolulu. Your
Committee recognizes the importance of these programs in promoting safer communities. The Career Criminal Prosecution Program,
pursuant to Chapter 845, Hawaii Revised Statutes (HRS), focuses on the
prosecution of repeat and violent offenders, and the Victim Witness Program,
pursuant to section 28-111, HRS, supports the provision of direct services to
victims of crime. Therefore, your Committee recommends supporting the
Department of the Attorney General and survivors of crime by adding the
requested $2,456,750 in
general
funds for the Career Criminal Prosecution Program and the Victim Witness
Program.
Your Committee received testimony
from the Department of Human Services (DHS) stating that without the $1,320,000
general fund appropriation for homeless programs, budgeted amounts for
contracted services would not keep pace with the cost of living adjustments. According to DHS, despite the increasing cost
of living, funds for purchase of service contracts have not been increased in
over a decade. Your Committee finds that
these funds are essential to avoid a reduction in these critical services, which
would exacerbate the homelessness crisis across Hawaii. Caring for individuals experiencing
homelessness also becomes more complex and difficult to serve the longer they
spend unsheltered or in encampments. Therefore,
your Committee recommends supporting efforts to combat houselessness by adding
the requested $1,320,000 general funds to increase funding for Homeless Program
Office contracts.
Your Committee received testimony
from the Department of Health (DOH) stating that with the $1 general fund
appropriation for psychiatric in-patient services, the bed lease contract with
Kahi Mohala would terminate. Legally
required to continue care for the patients housed at Kahi Mohala, these
patients would be returned to the Hawaii State Hospital (HSH) where current
census numbers have already exceeded the hospital's maximum capacity limit. The subject testimony notes that this would
not only severely impact the HSH's ability to provide quality in-patient
psychiatric care, but could cost the State an additional $20,000,000 annually. In light of the recent fatal stabbing of a HSH
staff member, your Committee recognizes the importance of providing adequate
resources to HSH to ensure the safety of the general public and our healthcare workers.
Therefore, your Committee recommends
supporting health, safety, and wellness initiatives by adding $14,800,000 for
psychiatric in-patient services, including $8,000,000 for contracted Services
at Kahi Mohala.
Your Committee
received testimony from the Department of Land and Natural Resources (DLNR)
stating that the $800,000 special fund ceiling increase for sport fishing would
have no negative financial impact to the general fund or Sport Fish Special
Fund. However, DLNR would not be able to
execute projects that were previously committed through the newly established
non-resident marine recreational sport fish license, in accordance with Act 48,
SLH 2021. Your Committee recognizes that
without the subject ceiling appropriation, the State jeopardizes up to
$1,000,000 in revenue generated from this new fee, which could provide stable
funding for local marine fishery resources, and up to $3,000,000 of federal
grants per year, pursuant to section 187A-9, HRS. Therefore, your Committee recommends supporting
the protection of natural resources by adding the requested $800,000 special
fund ceiling increase for sport fishing.
Your Committee
received testimony from the Department of Transportation (DOT) stating that the
$900,000 special fund ceiling increase for roadside safety maintenance would
have no negative financial impact to the general fund or State Highway Special
Fund. The subject testimony notes that
Hawaii Correctional Industries (HCI) performs grass cutting and litter pickup
that are vital to keeping State highways safe and clean. Without the subject increase ceiling
appropriation, more unsafe conditions will be created for the public and
motorists, and the backlog of work will be exacerbated. Furthermore, your Committee finds that the contract
with DOT is HCI's largest contract and provides inmates with the opportunity to
have real-life job experience and earn income in preparation for re-integration
back into the community. Without the
requested funding to DOT, the Department of Corrections and Rehabilitation
would begin to lay off employees. Therefore,
your Committee recommends increasing road safety by adding the requested
$900,000 special fund ceiling increase.
Your Committee
received testimony from DOT stating that the $300,000 special fund ceiling
increase for County of Hawaii police services would have no negative financial
impact to the general fund or State Highway Special Fund. The subject testimony notes that only County
of Hawaii Police Officers can direct traffic for emergency highway repairs and
that without these services, an unsafe condition will be created for the public
and motorists. Therefore, your Committee
recommends supporting road safety by adding the requested $300,000 special fund
ceiling increase.
Having received
testimony on the impacts of some of these proposed changes included in H.B. No.
1800, H.D. 1, your Committee has worked in collaboration with each impacted
department to identify the resources needed to deliver these critical programs
and services.
PART
II. OVERVIEW
Your Committee developed a state budget that is balanced, maintains core statewide services, and leaves the State with adequate levels of fiscal reserves by amending this measure to include:
(1) Certain appropriations for trade-offs,
transfers, change in means of financing, conversions of positions from
temporary to permanent, reductions, and additions from Governor's Message No. 2
(GM2), dated December 18, 2023, and Finance Memorandum No. 23-19, pursuant to Article VII,
section 9, of the Hawaii State Constitution;
(2) Certain appropriations for change in means and
financing, conversions of positions from temporary to permanent, reductions,
and additions from Governor's Message No. 5, dated March 5, 2024;
(3) The addition of funding for priority budget
requests as discussed below;
(4) The reduction of vacant positions in
accordance with the 2023 State of Hawaii Act 57, Session Laws of Hawaii (SLH)
2019 Vacancy Report provided by the Department of Human Resources Development (DHRD),
pursuant to section 26-5(a)(2), Hawaii Revised Statutes (HRS); and
(5) The funding for rental of buildings and land
to be non‑recurring, pursuant to section 40-14, HRS, which
requires the Comptroller to reduce the total square footage of leased space by ten
percent by 2026.
Your Committee has amended
this measure and proposes an operating budget with the following totals for the
fiscal year beginning July 1, 2024, and ending June 30, 2025 (FY25):
Means of Financing |
Governor's
Request (GM2) |
Governor's
Adjusted Request (GM5) |
Senate
Draft |
General Funds |
$10,222,773,724 |
$10,284,122,664 |
$10,321,347,535 |
All Means of Financing |
$19,242,796,966 |
$19,343,740,936 |
$19,098,388,299 |
PART
III. BUDGETING FOR WILDFIRE RECOVERY
Your Committee
acknowledges that on August 8, 2023, heavy winds from Hurricane Dora
transformed brush fires on the islands of Maui and Hawai'i into the worst
natural disaster in the State's history. Disaster proclamations by the County of Maui
and by the Governor were soon followed by a federal declaration by President
Biden. On October 30, 2023, Executive
Memorandum No. 23-08 was issued, which re-directed $164,097,551, after
adjustments, from selected general fund operating appropriations from Act 164,
SLH 2023, to address immediate 2023 wildfires funding needs.
Your Committee finds
that the state financial plan, as proposed by the Governor, pursuant to Article
VII, section 9, of the Hawaii State Constitution, allocated $600,000,000 across
the next four fiscal years for Maui wildfires recovery and response efforts. However, your Committee finds that, in
collaboration with the Hawaii Emergency Management Agency, Department of
Defense, and the Department of Budget and Finance, the State faces expenditures
and unfunded liabilities of over $600,000,000 in the fiscal year beginning July
1, 2023, and ending June 30, 2024 (FY24). To formalize spending guardrails and to help
ensure the financial security of the State, Executive Memorandum No. 24-01 was issued,
which requires approval from the Governor and the Department of Budget and
Finance for expenditures deemed likely to be ineligible for reimbursement from
the Federal Emergency Management Agency (FEMA). Your Committee passed a short form bill in an
amended form, Senate Bill No. 582, S.D. 1 – Relating to State Budget (S.B. No.
582), recognizing the immediate and imminent financial needs for wildfire
recovery efforts. Your Committee also held
an informational briefing on February 20, 2024, to illuminate these fiscal
challenges for the public.
Thereafter, your Committee
received Governor's Message No. 3 (GM3), dated February 26, 2024, which
requested expeditious consideration, in accordance with Article VII, section 9,
of the Constitution of the State of Hawaii, of S.B. No. 582. Your Committee acknowledges the necessity of
GM3 because the Administration's legislative package did not include an
emergency appropriation bill for wildfire recovery. However, while GM3 stated that expenditures
were expected to exceed the entire $199,097,551 appropriation deposited into
the Major Disaster Fund, it did not specify the financial resources needed for wildfire
recovery efforts. Your Committee notes
that in an informational briefing on February 29, 2024, the Department of
Budget and Finance informed your Committee that funds resulting from the five
percent
hard restrictions from each Executive Branch department would be transferred to
the Major Disaster Fund to cover the shortfall of funds that the Administration
initially projected for Maui wildfire recovery efforts.
Subsequently, your Committee
received Governor's Message No. 4 (GM4), dated March 1, 2024, which
recommended the proposed provisions for S.B. No. 582:
(1) A general fund appropriation of $297,000,000
to cover immediate expenses in FY24 for non-congregate sheltering and expenses
for individuals impacted by the wildfires who have been classified as not
eligible for Federal Emergency Management Agency assistance;
(2) A general fund appropriation of $65,000,000 to
cover the State's contribution to the One Ohana bank trust account to
compensate victims of the Maui wildfires; and
(3) Repeal of the $350,000,000 general obligation
bond appropriation for the Other Post-Employment Benefits Trust Fund originally
made in Act 247, Session Laws of Hawaii 2022.
In addition to the expenses in the amount of $362,000,000 that
was identified in GM4, your Committee finds that there may be additional
expenses that the State must pay upfront that are still being calculated. Based on information provided and requests
made from the Administration, your Committee estimates that general fund
obligations in FY24 for Maui wildfire recovery efforts total $754,216,070. This total does not include any cost overruns
due to the need to house displaced households in non-congregate sheltering
beyond June 2024.
Despite exhausting the
entire $199,097,551 appropriation deposited into the Major Disaster Fund and
identifying unfunded liabilities in the amount of $297,065,000 for Maui
recovery efforts, your Committee received GM5, which proposed an additional
$61,248,940 in general funds to the Executive Supplemental Budget for the
Departments of Agriculture; Accounting and General Services; Business, Economic
Development, and Tourism; Defense; Education; Human Services; Human Resources
Development; Health; Law Enforcement; Land and Natural Resources; and
Transportation; and the Hawaii Health Systems Corporation and the University of
Hawaii.
Lastly, your Committee
received Governor's Message No. 6 (GM6), dated March 7, 2024, to correct the
amount of the general obligation bond appropriation that was proposed to be
repealed in GM4 for the Other Post-Employment Benefits Trust Fund originally
made in Act 247, SLH 2022 from $350,000,000 to $300,000,000. Altogether, your Committee finds that neither the
Administration nor County of Maui have articulated a temporary or permanent
housing plan to address the impending cliff for non-congregate sheltering on
June 30, 2024.
The State's financial
commitment to wildfire recovery has been substantial in both services and
supports that may be reimbursable by FEMA. However, your Committee finds that the
constitutional responsibility and power to appropriate funds and adopt a balanced
budget rests solely with the Legislature. As such, your Committee remains resolute in providing
for wildfire survivors and maintaining core services and operations statewide
in areas like public education, healthcare, and protecting our natural resources.
PART IV.
COUNCIL ON REVENUES
Your
Committee acknowledges that the Council on Revenues increased the general fund
forecast for FY24 and FY25 in the January and March meetings, respectively.
The Council on
Revenues increased the estimated growth in revenues for FY24 from 1.30 percent
in the September 11, 2024, meeting to four percent in the January 10, 2024,
meeting. The revised forecast means an
increase in revenues by $248,405,000 from $9,319,912,000 to $9,568,317,000. The Council on Revenues' forecast revision was
attributed to robust general fund collections in the first half of FY24 and a faster-than
expected recovery in tourism and the labor market from the Maui wildfires.
The Council on Revenues increased
the estimated growth in revenues for FY25 from 4.75 percent in the January 11,
2024, meeting to 4.80 percent in the March 12, 2024, meeting. The revised forecast means an increase in general
fund revenues by $4,784,000 from $10,022,812,000 to $10,027,596,000.
The forecasts for the
state general fund tax revenues for FY24 through FY30 are shown in the table
below:
General Fund Tax Revenues |
||||||
|
September 11, 2023 |
January 10, 2024 |
March 12, 2024 |
|||
Fiscal Year |
Amount (in Thousands of Dollars) |
Growth From Previous Year |
Amount (in Thousands of Dollars) |
Growth From Previous Year |
Amount (in Thousands of
Dollars) |
Growth From Previous Year |
2024 |
$9,319,912 |
1.30% |
$9,568,317 |
4.00% |
$9,568,317 |
4.00% |
2025 |
$9,804,547 |
5.20% |
$10,022,812 |
4.75% |
$10,027,596 |
4.80% |
2026 |
$10,147,706 |
3.50% |
$10,473,839 |
4.50% |
$10,478,838 |
4.50% |
2027 |
$10,502,876 |
3.50% |
$10,892,793 |
4.00% |
$10,897,992 |
4.00% |
2028 |
$10,870,477 |
3.50% |
$11,274,041 |
3.50% |
$11,279,422 |
3.50% |
2029 |
$11,250,944 |
3.50% |
$11,668,632 |
3.50% |
$11,674,202 |
3.50% |
2030 |
$11,644,727 |
3.50% |
$12,077,034 |
3.50% |
$12,082,799 |
3.50% |
Your Committee finds
that despite the increased general fund forecast by the Council on Revenues for
FB25, fiscal restraint is imperative to ensure budget reserves that preserve
the State's bond rating and address the federal fund "cliffs" once the
FEMA mission ends. Your Committee has
identified the following unfunded liabilities that must be considered when exercising
our constitutional mandate to adopt a balanced budget:
(1) Funds for the continued Maui recovery and
response efforts, totaling an estimated $362,000,000 in FY24; and
(2) Funds for the Temporary Hazard Pay (THP)
settlement with the Hawaii Government Employees Association (HGEA), totaling an
estimated $299,700,000 in FY25.
PART
V. PRIORITIES OF THE SENATE
The Senate's approach
to balancing the budget entails considering the Council on Revenues' general
fund forecast and the unfunded liabilities associated with the Maui wildfire
recovery and response efforts and Temporary Hazard Pay settlements. Your Committee has worked diligently to create
a responsible financial plan and budget that continues to fund critical
services and programs, including the following areas identified by the Senate
Majority prior to the start of the 2024 Regular Session:
(1) Emergency
Preparedness, Recovery and Resilience;
(2) Workforce Development and Education;
(3) Economic Development and Infrastructure;
(4) Agriculture, Environment, and Natural Resource
Management; and
(5) Housing and Homelessness.
Your Committee has
deployed a number of strategies that will not only provide immediate cost
savings but help effectuate legislative policies and increase long-term
efficiencies. These strategies include:
(1) Reducing positions that have been vacant for
more than four years and positions that have been recommended to be abolished
by the Department of Human Resources Development (DHRD), pursuant to Act 57,
SLH 2019;
(2) Trading-off funds to appropriate funds for
building and land lease rent on a non-recurring basis to help minimize leased
office spaces pursuant to section 40-14, HRS, and to better align with telework
policies;
(3) Adding salaries for vacant and new positions
with a six‑month delay in hiring; and
(4) Adding funds for utilities, including for
electricity, on a non-recurring basis to facilitate progress toward our energy goals
pursuant to section 269-92, HRS.
Your Committee appreciates
DHRD's work in recommending vacant positions to abolish, pursuant to Act 57,
SLH 2019. In recommending vacant
positions to abolish, each Executive Branch department provided a list of their
vacant civil service positions that have remained vacant for more than four
years to DHRD. As of November 1, 2023, DHRD's
report stated that four hundred twenty civil service positions have been vacant
for four years or more. After viewing
the justifications from each department as to the reason for these prolonged
vacancies, as well as the current recruitment status, DHRD recommended one
hundred fifteen vacant civil service positions for abolishment. Altogether, your Committee recommends reducing
over five hundred full-time equivalent positions and over $30,000,000 for all
means of financing, including a reduction of over two hundred full-time
equivalent positions and $15,000,000 for general funds. To ensure that DHRD has proper time to recruit
and vet candidates, your Committee also recommends appropriating salaries for
new and vacant positions with a six-month delay in hiring.
Your Committee finds that the COVID-19
pandemic has expedited transitions to teleworking. According to DHRD's telework policy
guidelines, one of the objectives of the telework program is to reduce office
space requirements. This policy aligns
with section 40-14, HRS, which requires the State as of July 1, 2021, to reduce
the total square footage of space leased by the State by ten percent no later
than July 1, 2026. Your Committee has
identified over three-thousand full-time equivalent positions in Table 22 of
the Budget Informational Briefing documents collected from each department
prior to the legislative session that have been authorized to work remotely outside
of the dedicated central work site. Pursuant
to DHRD's statewide telework policy and section 40-14, HRS, the Senate Draft trades-off
funds to appropriate funds for building and land lease rent on a non-recurring
basis. In total, your Committee has
identified a total of over $25,000,000 budgeted for rental of buildings and/or
land for all means of financing, including $10,000,000 in general funds.
PART
VI. OPERATING BUDGET HIGHLIGHTS FROM HOUSE
BILL NO. 1800, SENATE DRAFT 1
Department of Agriculture (AGR)
The Senate Draft of
the executive budget for the Department of Agriculture makes general funds
appropriations of $21,606,726 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $31,624,054 in fiscal year 2025. Highlights for the Department of Agriculture
include:
1. Increase
the Animal Quarantine Special Fund ceiling by $733,076 for IT improvements to
the Animal Integration System;
2. Add
$1,000,000 for the Farm to Food Bank Program;
3. Add
$1,000,000 for the DaBux Program;
4. Increase
the trust fund ceiling by $93,434 for a Grant Writer position salary; and
5. Add
$52,500 as non-recurring for critical software upgrades.
Department of Accounting and General Services (AGS)
The Senate Draft of
the executive budget for the Department of Accounting and General Services
makes general funds appropriations of $156,188,882 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $77,488,955 in fiscal year 2025. Highlights for the Department of Accounting
and General Services include:
1. Add
$2,500,000 for Microsoft G5 licenses;
2. Add
$1,650,000 to replace the State's Financial System;
3. Add
$400,000 for menstrual products and dispensers for restrooms in public State
buildings;
4. Add
$1,000,000 as non-recurring for increase in electricity cost;
5. Add
$470,000 for telecommunications radio site leases, maintenance, and operations;
and
6. Add
$17,000,000 for State Risk Management Revolving Fund to address insurance claims.
Department of the Attorney General (ATG)
The Senate Draft of
the executive budget for the Department of Attorney General makes general funds
appropriations of $48,657,648 in fiscal year 2025. The Senate Draft also makes non‑general
fund appropriations of $72,611,613 in fiscal year 2025. Highlights for the Department of the Attorney
General include:
1. Add $2,456,750
for Career Criminal and Victim Witness Assistance Programs;
2. Add 4.0
positions and $462,134 for the Hawai'i Correctional System Oversight Commission;
3. Add 4.0
positions and $169,105 for the Civil Recoveries Division; and
4. Add
$266,648 for the Criminal Justice Division.
Department of Business, Economic Development, and Tourism (BED)
The Senate Draft of
the executive budget for the Department of Business, Economic Development, and
Tourism makes general funds appropriations of $314,924,788 in fiscal year 2025.
The Senate Draft also makes non-general
fund appropriations of $250,990,367 in fiscal year 2025. Highlights for the Department of Business,
Economic Development, and Tourism include:
1. Add 30.0
positions and $63,000,000 for the Hawai'i Tourism Authority;
2. Increase
Convention Center Special Fund ceiling by $45,000,000 as non-recurring for
deferred maintenance;
3. Increase
Aloha Stadium Special Fund ceiling by $49,500,000 as non-recurring for
operations and development;
4. Add 2.0
positions and $230,230 for property and water system management on Kaua'i; and
5. Increase
Creative Industries Special Fund ceiling by $475,000 for State-County
Memorandum of Agreements.
Department of Budget and Finance (BUF)
The Senate Draft of
the executive budget for the Department of Budget and Finance makes general
funds appropriations of $3,746,882,057 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $521,710,124 in fiscal year 2025. Highlights for the Department of Budget and
Finance include:
1. Increase
the Unclaimed Property Trust Fund ceiling by $4,000,000 for disbursement of
payments;
2. Add
$13,356,628 for broadband to match federal funds; and
3. Add
$126,000 as non-recurring for the procurement of a case management software for
the office of the public defender.
Department of Commerce and Consumer Affairs (CCA)
The Senate Draft of
the executive budget for the Department of Commerce and Consumer Affairs makes non-general
fund appropriations of $116,482,369 in fiscal year 2025. Highlights for the Department of Commerce and
Consumer Affairs include:
1. Increase
special fund ceiling by $1,175,000 for increase in operating costs;
2. Increase
special fund ceiling by $2,500,000 as non‑recurring for website redesign
and call center; and
3. Increase
special fund ceiling by $550,000 as non-recurring for cloud migration and data
center closure.
Department of Defense (DEF)
The Senate Draft of
the executive budget for the Department of Defense makes general funds
appropriations of $40,218,126 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $98,206,207 in fiscal year 2025. Highlights for the Department of Defense
include:
1. Add
$6,919,624 for Hazard Mitigation and $24,700,000 in to match federal funds;
2. Add
$1,430,900 as non-recurring for utilities cost at Joint Base Pearl
Harbor-Hickam, Kaua'i, and Kalaeloa;
3. Add
$497,000 as non-recurring for utilities at Hawai'i Army National Guard
facilities statewide;
4. Add
$139,909 for State Warning Point and sirens; and
5. Add $7,000
as non-recurring for utilities at Starbase.
Department of Education (EDN)
The Senate Draft of
the executive budget for the Department of Education makes general funds
appropriations of $2,395,785,069 in fiscal year 2025. The Senate Draft also makes non-general fund appropriations
of $407,776,641 in fiscal year 2025. Highlights
for the Department of Education include:
1. Add
$12,931,380 as non-recurring for the Weighted Student Formula to support
English learners;
2. Add
$413,915 as non-recurring for AP exam and course subsidies;
3. Add
$3,600,000 to provide work-based learning for students with severe disabilities;
4. Add
$20,990,000 as non-recurring for summer learning hubs;
5. Add
$18,266,346 for bus contracts;
6. Add
$10,000,000 for workers' compensation;
7. Add
$14,925,959 for collective bargaining for vice principals and educational
assistants;
8. Add
$2,500,000 for career and technical education teacher differentials; and
9. Add
$1,700,000 to enhance the Department's mobile platforms that provide student
mental health support.
Office of the Governor (GOV)
The Senate Draft of
the executive budget for the Office of the Governor makes general funds
appropriations of $5,249,958 in fiscal year 2025. The Senate Draft reduces 2.0 vacant positions
and $176,816.
Department of Hawaiian Home Lands (HHL)
The Senate Draft of
the executive budget for the Department of Hawaiian Home Lands makes general
funds appropriations of $26,350,840 in fiscal year 2025. The Senate Draft also makes non‑general
fund appropriations of $39,691,974 in fiscal year 2025. Lastly, the Senate Draft increases the federal
fund ceiling by $808,204 for 6.0 Temporary Native American Housing Assistance
and Self-Determination Act (NAHASDA) positions.
Department of Human Services (HMS)
The Senate Draft of
the executive budget for the Department of Human Services makes general funds
appropriations of $1,494,419,926 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $2,947,365,361 in fiscal year 2025. Highlights for the Department of Human
Services include:
1. Add a
total of $213,979,324 in non-general funded ceiling increases for federally
mandated services;
2. Add
$15,525,000 for Home and Community Based Service contract increases;
3. Add
$1,320,000 for a five percent increase to Homeless Programs Office
contracts;
4. Add
$1,000,000 for youth mental health services;
5. Add
$543,677 for maintenance and operation of the Benefits Eligibility Solution
System;
6. Add
$1,500,000 as non-recurring for the State Rent Supplement Program; and
7. Add 2.0
positions and $252,360 to put the Deputy Director and Private Secretary into
base budget.
Department of Human Resources Development (HRD)
The Senate Draft of
the executive budget for the Department of Human Resources Development makes
general funds appropriations of $27,432,039 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $5,877,980 in fiscal year 2025. Highlights for the Department of Human
Resources Development include:
1. Add 7.0
positions and $872,112 to expedite the hiring process and increase recruitment
efforts;
2. Add 1.0
position and $35,508 for the employee benefits and telework programs;
3. Add $20,000
for employee training; and
4. Transfer
1.0 position and $260,352 in FY24; and 1.0 position and $262,116 in FY25 for
workers' compensation services for the Hawaiʻi State Public Library System.
Department of Health (HTH)
The Senate Draft of
the executive budget for the Department of Health makes general funds
appropriations of $847,844,203 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $1,331,222,577 in fiscal year 2025. Highlights for the Department of Health
include:
1. Add
$29,000,000 for emergency aeromedical services;
2. Add
$14,800,000 as non-recurring for bed contracts for the Hawai'i State Hospital;
3. Add
$13,000,000 as non-recurring for Locum Tenens contracts at the Hawai'i State
Hospital;
4. Add $10,800,000
for Child and Adolescent Mental Health contracts;
5. Add
$8,880,000 for new and existing Group Home contracts;
6. Add
$6,657,400 for the 'Iwilei Behavioral Health Crisis Center and supportive
housing services;
7. Add
$4,962,487 for early intervention services;
8. Add 10.0 Forensic Psychologists and
$971,119 for court evaluations for Hawai'i State Hospital admissions and
referrals; and
9. Add 1.0 Plumber position, 1.0
General Laborer position, and $61,278 for Kalaupapa Settlement.
Department of Law Enforcement (LAW)
The Senate Draft of
the executive budget for the Department of Law Enforcement makes general funds
appropriations of $47,789,505 in fiscal year 2025. The Senate Draft also makes non‑general
fund appropriations of $43,542,923 in fiscal year 2025. Highlights for the Department of Law
Enforcement include:
1. Add 50.0
positions and $6,567,591 to increase law enforcement at airports and harbors;
2. Add
$2,600,000 to continue security guard services and security camera monitoring
within the State Capitol District;
3. Add
$1,500,000 for the Law Enforcement Training Center;
4. Add
$1,265,600 to continue the Illegal Firework Task Force; and
5. Add
$825,000 as non-recurring for the Gun Buyback Program.
Department of Labor and Industrial Relations (LBR)
The Senate Draft of
the executive budget for the Department of Land and Natural Resources makes
general funds appropriations of $37,182,823 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $426,067,923 in fiscal year 2025. Highlights for the Department of Labor and
Industrial Relations include:
1. Add
$10,000,000 for Grants-in-Aid pursuant to Chapter 42F, HRS;
2. Increase
revolving fund ceiling by $51,914 to provide pay equity for 3.0 Boiler
Inspectors;
3. Increase
federal fund ceiling by $2,200,000 for Unemployment Insurance;
4. Increase
special fund ceiling by $300,000 for Labor Law Enforcement Special Fund; and
5. Increase
federal fund ceiling by $200,000 for veteran career counseling.
Department of Land and Natural Resources (LNR)
The Senate Draft of
the executive budget for the Department of Land and Natural Resources makes
general funds appropriations of $115,653,464 in fiscal year 2025. The Senate Draft also makes non-general fund appropriations
of $222,245,131 in fiscal year 2025. Highlights
for the Department of Land and Natural Resources include:
1. Add
$5,500,000 as non-recurring to improve forest and resource management for
wildlife and invasive species;
2. Increase
State Parks Special Fund ceiling by $2,000,000 as non-recurring for equipment
and motor vehicles;
3. Increase
State Parks Special Fund ceiling by $10,000,000 for repair and maintenance
activities at state parks statewide;
4. Add 7.0 positions and $484,448 for
DLNR HR recruitment and retention; and
5. Increase Sport Fish Special Fund
ceiling by $800,000 for administrative costs.
Office of the Lieutenant Governor (LTG)
The Senate Draft of
the executive budget for the Office of the Lieutenant Governor makes general
funds appropriations of $2,365,231 in fiscal year 2025. The Senate Draft also makes non‑general
fund appropriations of $300,000 in fiscal year 2025. Your Committee proposes no changes to the
budget for the Office of the Lieutenant Governor.
Department of Corrections and Rehabilitation (PSD)
The Senate Draft of
the executive budget for the Department of Corrections and Rehabilitation makes
general funds appropriations of $303,095,682 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $15,334,137 in fiscal year 2025. Highlights for the Department of Corrections
and Rehabilitation include:
1. Add
$50,000 to establish a Foster Pet Program; and
2. Add
$434,864 as non-recurring for utilities across various facilities.
Department of Taxation (TAX)
The Senate Draft of
the executive budget for the Department of Taxation makes general funds
appropriations of $38,881,763 in fiscal year 2025. The Senate Draft also makes non-general fund appropriations
of $3,627,620 in fiscal year 2025. Highlights
for the Department of Taxation include:
1. Add 1.0
Senior Software Developer position and $63,096;
2. Add
$98,000 for security equipment and vehicle contracts; and
3. Add
$11,800 for the Multi-Factor Authentication System.
Department of Transportation (TRN)
The Senate Draft of
the executive budget for the Department of Transportation makes general funds
appropriations of $5,000,000 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $1,457,256,517 in fiscal year 2025. Highlights for the Department of
Transportation include:
1. Add
$5,000,000 as non-recurring for the Stored Property and Debris Removal Program;
2. Increase the
DOT Airports Division's special fund ceiling by $10,000,000 as non‑recurring
to renovate airport terminals;
3. Increase the
DOT Highways Division's special fund ceiling by $3,000,000 for roadside safety
maintenance; and
4. Increase the
DOT Highways Division's special fund ceiling by $1,250,000 as non‑recurring
for Google safety analytics.
University of Hawaii (UOH)
The Senate Draft of
the executive budget for the University of Hawaii makes general funds
appropriations of $645,818,805 in fiscal year 2025. The Senate Draft also makes non-general fund
appropriations of $707,618,291 in fiscal year 2025. Highlights for the University of Hawaii
include:
1. Add
$17,526,848 as non-recurring to restore funds to pre‑pandemic levels;
2. Add 5.0
positions and $506,555 for CTAHR Extension Agents;
3. Add 6.5
positions and $1,068,821 for a nursing collaboration between UH Mānoa and
UH West O'ahu;
4. Add 4.0
positions and $925,000 for enhancement of the neighbor island health access and
pathway program;
5. Add 4.0
positions and $1,208,020 for increased campus safety; and
6. Add
$3,700,000 as non-recurring for the Promise Program at UH Community Colleges.
PART
VII. CAPITAL IMPROVEMENTS PROGRAM BUDGET
The Governor proposed a state capital improvement budget to the
Legislature with the following totals:
Governor |
FY24 |
FY25 |
General Funds |
$384,265,000 |
$148,677,000 |
General Obligation Bond Funds |
$887,237,000 |
$1,229,093,000 |
All Means of Financing |
$2,933,046,000 |
$4,196,220,000 |
Your Committee has further amended this measure and proposes a
capital improvement budget with the following totals:
Senate Draft |
FY24 |
FY25 |
General Funds |
$374,265,000 |
$443,248,000 |
General Obligation Bond Funds |
$879,737,000 |
$1,032,960,000 |
All Means of Financing |
$2,905,646,000 |
$4,285,608,000 |
PART
VIII. RECOMMENDATION
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1800, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1800, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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________________________________ DONOVAN M. DELA CRUZ, Chair |