Coronavirus Relief Bill Undergoes Modifications with Eight Line-Item Vetoes

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Gov. David Ige today notified the House and Senate that he will be making some modifications to SB126 with eight line-item vetoes.

The primary concern is the federal government is requiring that all CARES funds must be expended by the end of the year.  Gov. Ige said the suggested changes would give the state maximum flexibility to ensure funds are not left unused.

State officials say the inability of Congress to appropriate additional COVID-19 funding “creates uncertainty at the state level about what can or should be done.”

In terms of unemployment benefits, Gov Ige said the US House has approved the HEROES Act which continues the $600 million additional UI benefit through the end of this year.  The proposal announced by the Senate, Gov. Ige said, “provides a very limited UI increase of $200 for two months.  And then they provide that the state should take action to provide 70 percent of a person’s earned income in the previous year.”

Gov. Ige called it “virtually impossible” to implement anything like that.  “We’ve shared our concerns with Congress.  We hope the House will prevail,” he said.

“I do believe that the reduction in the $600 per week plus-up will have significant impacts on those who continue to be unemployed,” said Gov. Ige. “We are monitoring that.  As the legislature had provided  and we supported additional support for those who continue to be unemployed.  I did acknowledge and recognize the the $600 additional funds was very generous and helped many who are unemployed to be able to make ends meet in a way that shielded the full economic impact of being unemployed.”

Gov. Ige and his administration have been working with House and Senate leadership to respond appropriately.

“This means we need maximum flexibility to use the funds where they are needed most. It will not serve our community if the funds are designated for a specific purpose by the budget bill, and the funds are not used because they were not necessary or they duplicated by potential federal support,” said Gov. Ige.

“These are unprecedented times when we are facing enormous budget challenges as a result of COVID-19. Difficult decisions will have to be made.”

In response to Maui Now’s question related to overall expenditures used to date, Gov. Ige said the state has expended about 10 percent of the CARES Act funds that Hawaiʻi received.  “We are right in the middle.  When you rank all of the states’ expenditures of CARE Act funds, the state of Hawaiʻi ranks 26th out of the 50 states.  Many of the states are doing just like we are.  We are assessing the various aid programs that are being provided by the federal government.  We want to maximize the benefit.”

He continued saying, “As you know there’ve been direct appropriations to hospitals… health care facilities and nursing homes.  So as we look at how we would like to spend the CARES Act funds that the state controls, we want to make sure that we maximize all of the funds that we receive from the federal government, and provide those services and needs within our community that would be in the best use of the funds,” said Gov. Ige.

The line-item vetoes for SB126 include:

1) Decreased from $90M to $70M, the appropriation out of the Emergency and Budget Reserve Fund for airport screening and health assurance security initiatives.

Rationale: “The Department of Transportation believes, and I agree, that $70M will be sufficient for equipment and services to test, verify and monitor travelers, and for other health assurance security initiatives as needed.”

2) Decreased from $230M to 0, the appropriation out of the Emergency and Budget Reserve Fund to provide an additional weekly unemployment benefit of $100 per week to state eligible recipients.

Rationale: “The US Congress is negotiating another economic stimulus package. Since the package is not yet clear, and because I must act now – I must line-item veto this appropriation. The most effective use of these funds to support the needs of the community, will be determined once Congress has acted.”

3) Decreased the $100M appropriation out of the Emergency and Budget Reserve Fund to $50M for housing and rental assistance and administrative costs related to the housing relief and resiliency program.

Rationale: “The Hawai‘i Housing Finance and Development Corporation (HHFDC) believes, and I agree, that an initial working capital of $50M is sufficient to start a program from now until the end of the year. It will help renters and homeowners who have experienced a reduction in income because of unemployment or reduction in work hours due to COVID-19. If additional funding is needed beyond the initial working capital amount, it will be provided at a later date.

“For example, the bill only provides benefits from Aug. 1 through the end of the year. Funds saved by the reduction may be applied to the period March 1 through Aug. 1.”

4) Decreased the $100M appropriation out of the Emergency Budget and Reserve Fund to $61M for the purchase and distribution of personal protective equipment (PPE) to hospitals, childcare facilities, elderly care facilities, businesses, non-profits, and schools.

Rationale: “The appropriation does not include the purchase and distribution of sanitation or disinfectant supplies. The Department of Defense believes, and I agree, that $61M is sufficient for the purchase and distribution of PPE to eligible organizations. The remaining funds will be used to purchase and distribute sanitation and disinfectant supplies.”

5) Decreased the $36M appropriation out of the Emergency Budget and Reserve Fund to $10M for retraining and workforce development programs.

Rationale: “According to the Department of Business, Economic Development, and Tourism’s business plan, $10M is sufficient to launch workforce retraining programs for individuals impacted by COVID-19. Additional funding will be provided as needed.”

6) Decreased the $15M appropriation out of the Emergency and Budget Reserve Fund to $10M to support emerging industries to create a supply chain for cleaning supplies and PPE.

Rationale: “The Hawai‘i Technology Development Corporation believes, and I agree, that $10M is sufficient to provide start-up funding to businesses in this emerging industry. An additional $5M may be available later.”

7) Decreased the $2M appropriation out of the Emergency and Budget Reserve Fund to $1M for a public-private partnership (PPP) to provide support to public high school seniors who were adversely affected by school closures in their final semester of school.

Rationale: “An initial working capital of $1M is adequate to begin establishing these programs. As they become successful, additional funds may be provided.”

8) Decreased the $1,080,000,605 appropriation out of the Emergency and Budget Reserve Fund to $648M for deposit into the general fund.

Rationale: “I understand that, of the $1,080,000,605 appropriated for deposit into the general fund, $432,000,605 of that amount represents fiscal biennium 2019-2021 general fund appropriation reductions. A general fund appropriation reduction does not represent cash – it represents reduced spending authority. Consequently, this appropriation is overstated by $432,000,605.”

As is the normal process, Gov. Ige returned the unsigned bill, with line-item vetoes to the House and Senate today. He will sign SB126 with the line-item vetoes and submit the bill to the Legislature tomorrow.

The decision can be overridden by two-thirds of the House and Senate, so that the original appropriation would stand.  “In the case of $230 million for unemployment insurance, should the legislature convene and override that line item, then it would remain a appropriated at $230 million,” he said.