House Finance Committee Approves Hawai‘i State Budget Bill

The House Finance Committee amended and passed the state operating budget for fiscal years 2021-2022 and 2022-2023. House Bill 200, House Draft 1 now moves to the full House for a vote on third reading.

At the start of the legislative session, the State projected a deficit of almost $2 billion. Governor David Ige proposed employee furloughs and presented the Legislature a budget that cut critical safety net services. He had also borrowed $750 million to pay for operating expenses for the first time in Hawaiʻi’s history. 

On March 11, Gov. Ige announced that furloughs and layoffs are no longer necessary after President Joe Biden signed the $1.9 trillion American Rescue Plan, also known as the COVID-19 relief bill.

The $1.6 billion in federal funds allocated to the State in the American Rescue Plan Act provides a temporary reprieve for the State’s financial crisis.

The budget approved by the House Finance Committee appropriates $31.36 billion for two fiscal years. This budget appropriates the $1.6 billion in ARPA funds and $15.17 billion in general funds, $311 million less than was presented in the Governor’s budget.

Highlights of the House Budget include:

• ARPA and other federal programs are providing additional funding for COVID public health infrastructure (testing, contact tracing, and vaccinations). Thus, additional appropriations are not needed in this budget. 
• More than $740 million in ARPA funds are being allocated to repay the unemployment insurance (UI) loan principal and interest. While Act 1, SLH 2021 was fast tracked to prevent employers from facing dramatic UI rate increases, resolving and repaying this loan debt will provide necessary long-term solvency for the UI trust fund.
• Restores funding for critical safety net services such as sex abuse treatment, HIV prevention, and perinatal services.
• Government streamlining was addressed through the consolidation of the Land Use Commission, Land Survey Division, and Office of Environmental Quality Control with the Office of Planning to create the Office of Planning and Sustainable development and transfer of PISCES to UH.
• The budget was balanced without adding additional tax burdens to Hawaiʻi residents.