Maui recovery funding remains in the balance as state lawmakers near session’s end

Mayor Richard Bissen and Managing Director Josiah Nishita updated Maui County Council members Thursday morning on the status of the county’s request for state funding to help with the staggering costs of rebuilding infrastructure destroyed in the Aug. 8-9 wildfires disaster.

In February, Bissen asked state lawmakers to appropriate $400 million for Maui recovery over three years. As of Thursday, however, Senate Bill 3068 Senate Draft 1 House Draft 1 would authorize only $63.56 million in reimbursable general obligation funds for capital improvement projects.

The money would be a loan, repaid with interest costs amounting to about $3.5 million a year for five years, or $17.5 million, the mayor said, adding that paying that amount of interest “would not be fiscally prudent.”

Now, the county has reduced its wildfire funding request to $125 million — $50 million as a no-interest loan and $75 million in cash, Bissen said. “And that’s what’s currently on the table.”

Nishita said he thought state lawmakers would delay making a decision until Friday, April 26, which is “final decking,” or the deadline for bills to be delivered to House and Senate clerks for final action.

This year’s lawmaking session ends May 3.

Bissen said that, if state lawmakers don’t grant Maui County’s wildfire recovery request for funding, “then obviously we’ll have to carry the load ourselves, as the county.” The mayor alluded to some other options being considered, but “we’re not there yet.”

Facing their own decisions for Maui County’s fiscal 2025 budget, members of the Council’s Budget, Finance and Economic Development Committee pressed for specifics about the administration’s plans if state funding doesn’t come through.

Nishita suggested discussing that question in a closed executive session, but it was ultimately decided there were insufficient legal grounds to do so. He then offered to brief council members individually.

“Obviously, there’s a variety of different funding mechanisms at the county’s disposal,” he said. And, “our West Maui residents are top of mind for us, and we have to get these projects done for them.”

The worst-case scenario, he said, is that “we get nothing, or we get something that’s not usable.” Also, Senate Bill 3068, as it stood Thursday, would exclude a lot of Maui’s needed infrastructure projects, he said.

Nishita said he has shuttled so much recently between Maui and Oʻahu that he qualified for Hawaiian Airlines’ Pualani Gold frequent-flier program in just three weeks. “We have had a lot of discussions with a lot of different members” of the Legislature, he said, and “we’re just looking forward to obtaining some support from the state for our overall recovery efforts.”

He added that lawmakers have been assured that “we’re not here to make money off of the state or anything for those federal reimbursements coming in.”

Bissen acknowledged that “the state has committed lots of funds to Maui.”

“It’s not that the state hasn’t been providing funds for Lahaina because they have,” he said.

The Senate bill’s findings note that the wildfires brought on by winds from Hurricane Dora on Aug. 8 resulted in one of the worst natural disasters in the state’s history. Already, the federal government has allocated $2 billion for recovery efforts in Hawaiʻi, with the money requiring Federal Emergency Management Agency approval before it can be spent.

Also, it says, that Gov. Josh Green redirected $172.8 million from general fund operating appropriations to the major disaster fund, bringing the fund to a total of $199.1 million for initial wildfire response and recovery. That includes the state’s expected share of non-congregate housing and debris clean-up costs initially paid by the Federal Emergency Management Agency.

A supplemental state budget for fiscal 2024-25 appropriated $69.5 million, including $33 million for repair and rehabilitation of highways in Lahaina and $20.97 million for wildfire response, rehabilitation, fuel reduction and fire and emergency response equipment at the Department of Land and Natural Resources.

For the county’s $63.56 million loan, the bill provides that $20 million would be spent on wastewater collection systems; $10 million for fire flow improvements to water systems; $10 million for water infrastructure repairs and replacements; $8 million for storm drainage, flood control and water quality improvements; $8 million for roadway improvements for disaster evacuations; $4.56 million for a final debris disposal site; and $3 million for traffic signal replacement.

The bill requires Maui County to reimburse the state for all interest payments on debt service for the reimbursable general obligation bonds, provided that any reimbursements received by the state from FEMA would be credited toward any principal payments made by the state treasury for the bonds.

Council Chair Alice Lee said the Council will need to cut funding in the county’s budget to pave the way for state funding. She said she went to Honolulu in February to lobby lawmakers for disaster recovery assistance, and they asked “what are we cutting?”

“They don’t like the idea of expansions in the budget,” she said. “They don’t like the idea of over-funding… We have to show them something… We have to cut back as difficult as it might be.”