Uncertainty over federal funding cuts hangs over the upcoming budget talks for Maui County

Maui County Council members are preparing to “tighten our belts” and tuck funding into emergency savings as worries mount about the federal government’s massive budget cuts under President Trump. 

Mayor Richard Bissen will deliver the fiscal year 2026 budget to the council on Tuesday, giving the nine members about three months to hammer out a final product that will balance the wildfire recovery in Lahaina and Upcountry with other pressing needs of Maui, Lānaʻi and Molokaʻi. 

“The council needs to go over the budget with an extra powerful magnifying glass … and try to identify areas of savings, and put that savings aside for a rainy day,” Council Chair Alice Lee said. “So that no matter what happens, no matter which way the road turns in the foreseeable future, we will be at least covered.”

Bissen was traveling out of state this week but his office said he could address more questions about the specifics of the budget once he presents it to the council. The mayor said during his State of the County address earlier this month that his budget will prioritize “stronger services, modernized infrastructure and long-term sustainability.”

Council members met virtually with Hawaiʻi Gov. Josh Green and U.S. Sen. Brian Schatz on Thursday to discuss the policies of Trump’s administration, which have included heightened tariffs on materials needed for the rebuild of Lahaina, cuts to the Federal Emergency Management Agency that’s been heavily involved in Maui’s wildfire recovery and attempts to freeze federal grants that are relied on by states and counties across the United States.

“There is this very serious feeling of uncertainty, and so we’re just going to have to deal with everything day to day, case by case,” Lee said. 

The county has been buoyed by the promise of $1.6 billion in Community Development Block Grant Disaster Recovery funding to help cover projects directly related to the recovery from the Aug. 8, 2023 wildfires, which killed at least 102 people and burned down more than 2,000 structures.

But as federal agencies are gutted by the Elon Musk-led Department of Government Efficiency, the office that handles the disaster grant funding is slated to lose 84% of its staff, which local officials worry could delay Maui County’s access to the money.

That’s why the county is trying to move quickly to secure the funds. On Friday, the council unanimously passed a bill on first reading that would add the grant to the current county budget and pay for up to 56 staff to help handle the funding.

The Office of Recovery has big plans for the grant: $900 million for housing, $350 million for infrastructure, $213.8 million for mitigation, $90 million for public services and nearly $82 million for administrative costs.

The office expects to submit the draft plan to the Department of Housing and Urban Development by April 21. HUD will then provide feedback or approval within 45 days. 

However, the grant is supposed to be a last resort, and council members say that while they still expect the county to get the funding, they are heading into budget talks with caution. 

Lee will be looking for any way to put savings into the rainy day fund. The county has struggled to fill hundreds of job vacancies in recent years, and Lee said the council may need to take a closer look at the positions that have been the hardest to fill and potentially cut funding while still being flexible enough to restore it if the administration is able to hire more people.

She said projects that don’t have the staffing and resources to move forward at the moment may have to be deferred — “anything and everything we can without sacrificing quality service.”

“We just have to sharpen our pencils and tighten our belts for the next couple of years,” Lee said.

Council Member Tamara Paltin holds the West Maui seat and recently attended meetings in Washington held by the National Association of Counties. She said Hawai‘i’s congressional delegation advised local officials that “this isn’t the year to do big projects” and that they might need to be more conservative with their funding. 

“I’m really, more than any other year, entering into this budget with a pretty fluid mindset,” Paltin said. “I’m going to really take in and listen to public testimony of what people need and see how to balance it out.”

Of the “million and one needs” in Lahaina, housing is at the top, Paltin said. She wants to see the county continue the $3.5 million pilot program launched last year to help people whose insurance payouts weren’t enough to rebuild their homes. 

Public safety also is a priority for Paltin. She thinks expanding public transportation, which could accommodate workers in the service industry who work odd hours, could help get cars off the roads. This would have helped in areas of Lahaina where overcrowded street parking clogged evacuations during the fire. 

Council Member Yuki Lei Sugimura, who holds the Upcountry seat and chairs the council’s budget committee, pointed out that during last year’s budget session, the first since the 2023 wildfires, the focus was mainly on the recovery. 

Last year, the council approved a $1.3 billion budget for the fiscal year that runs from July 1, 2024 to June 30, 2025. It expanded the Affordable Housing Fund, added more staffing to the Maui Emergency Management Agency and the Maui Fire Department, and put aside funding for programs like the $11.5 million it gave to the Lahaina Community Land Trust to buy properties in the burn zone and the $36 million loan it included to help the 89-unit Kaiāulu o Kupuohi rental housing project rebuild in Lahaina. 

Now, Sugimura said, with the help of a sizable federal grant, the county can start focusing funding on other county projects that are still needed but took a backseat. That includes investing in developing more water sources for growing communities as well as public infrastructure like roads and wastewater that are needed for affordable housing projects.

For example, building a new wastewater treatment plant in Central Maui and extending Wai‘ale Road will help move forward the long-awaited Waikapū Country Town project, which is slated to include 500 workforce units and 1,500 housing units overall.

But even as attention turns to other projects, Sugimura is still worried about putting all of the county’s eggs in one basket. 

“Every day President Trump is doing something interesting, and I’m afraid he may decide to stop the grant or do something to obstruct it,” Sugimura said. “He’s already obstructing it in a different way by getting rid of HUD employees. … The faster we can get our paperwork in to the federal government, the better.”

The federal grant isn’t the only thing in the county’s favor as the local economy tries to recover from the fire. The state likely will receive a spike in revenue from general excises taxes paid by contractors who are rebuilding Lahaina, Lee said.

Last year, a new surcharge on top of those taxes took effect and was projected to generate about $80 million a year for the county.

Overall though, the council members said they don’t want to raise taxes — especially for people who live in and own their homes and for small business owners — at a time when there is already a lot of uncertainty in the economy. 

“It wouldn’t be a good time to cut taxes, but it might be a very good time not to raise taxes,” Lee said.

She pointed out that higher property assessments, which many property owners are experiencing in the county this year, could increase revenues without the county even needing to hike fees.

Once the council receive’s the mayor’s budget, it plans to hold meetings in every county district in the coming weeks to listen to community requests. 

“If you have needs,” Paltin said. “Let us know, and let us know early.”