Ways and Means Committee Chair Makes Statement in Support of Proposed State Budget

COVID-19 Legislature reconvenes. PC: Hawai’i Senate Majority

At Thursday’s session marking the end of this portion of the extended legislative session, Ways and Means Committee Chair Donovan Dela Cruz rose to make the following statement in support of the state budget as worked out by his finance committee: 

Here is the full statement from the senator: 

“In support, Mr. President, this legislative body understands the gravity of the situation and the impact on every resident of the state. We owe the citizens of this state both immediate and long-term stability and security. We need to think and act responsibly and prudently with the federal resources that are being provided to us.

“Hawaii’s economy relies heavily on tourism, not the case for the states that were held up as examples. Tourism accounts for 20 percent of our state’s economy. On May 7^th, Dr. Tian presented, on the economic impacts of COVID-19, estimates that our state’s non-tourism sector will take at least two years to recover. For tourism, he estimates it will take five-six years.

“It costs $677 million to operate the state government monthly, so we can run our state hospitals, pay for education, maintain safety net programs, take care of our natural resources, and the list goes on. Looking at state tax collection reports – collections of $533 million in March 2020, as compared to $590 million in March 2019 – the state is down $57 million. For April 2020, compared to April 2019, collections are down by $350 million. In speaking with the Department of Taxation, the downward trend is to continue into May. 

“The Council on Revenues will be meeting in exactly one week. Before we commit every dollar of the Federal CARES Act, we should pause and see what the economic  forecast will be.

“I want to highlight and reiterate to the Senate membership and the public that millions of dollars of relief funding for food and grants for businesses are being provided directly to State and County agencies. The Legislature and Counties agree on, and have developed and coordinated, budget plans that will meet the needs for the State.

“(Concerning) the Emergency Food Assistance Program, through the State Office of Community Services, two appropriations were received from the federal government:

• The Families First Coronavirus Response Act provided $1.136 million, of which $880,000 will be food purchases.
• The Federal CARES Act provided $1.278 million, of which the full amount will be for food purchases.

“The State Office of Community Services will order through the USDA and work with non-profit organizations, such as the Hawai‘i Foodbank, in distribution to the public.

“The State Executive Office on Aging received $1.2 million from The Families First Coronavirus Response Act, of which $400,000 will be used for congregate meals, and $800,000 will be used for home delivery meals. In addition, the office received $2.4 million from The Older Americans Act, of which the full amount will be used for home delivery meals.

“(Regarding) the Supplemental Nutrition Assistance Program, or SNAP, the Department of Human Services has seen a spike of almost 17,000 applicants for the month of April, as compared to the same point in time last year. In speaking with the Director, the department has been able to keep up with the filings and was approved last week to provide emergency SNAP supplements to address temporary food needs for SNAP households.

“The emergency supplements will benefit approximately 60,000 households, about 75 percent of the total households currently receiving SNAP, and will bring in more than $13 million per month in federal food assistance. To address our growing food needs, we have allocated an additional $2 million towards SNAP funding in SB 75.

“The Department of Labor and Industrial Relations (DLIR) has received $3.9 million of emergency grants for administration of the state’s unemployment compensation law. The department also has applied for, and has been approved by the U.S. Department of Treasury, for a quarterly, no-interest line of credit for $1.3 billion. The DLIR is working on determining what the state’s repayment schedule will be. This line of credit can only be utilized once the Unemployment Compensation Fund has a zero balance.

“In addition, the Pandemic Emergency Unemployment Compensation was launched this week. This program allows for an additional 13 weeks of payments to individuals whose regular unemployment benefits ended on or after July 1, 2019. Both the costs of the new federal benefits and the funding to the states for the administration of the program are 100 percent federally funded.

“The State Office of Community Services administers an estimated $5.2 million on Community Services Block Grant (CSBG) funds, which could potentially be used for:

• Community Action Agencies (CAAs) to respond to the economic impacts of the COVID-19 pandemic on people with low incomes (individuals up to 200 percent of the federal poverty line).
• Support and possibly expand anti-poverty programs that the CAAs currently have. Some  of those programs include, but are not limited to, rental and utility bill assistance, food delivery for seniors and the disabled, support for existing food programs like the Senior Farmers Market; transportation services, particularly to seniors and disabled individuals; child care, homeless prevention, and emergency shelter.
• CAAs may also use the funds to coordinate services and refer clients to other resources needed to address clients’ situations.
• CAAs will use the funds for other programs as they deem necessary to address the current situation and in the recovery efforts to address the economic and community consequences of the outbreak in accordance with the CSBG Act.

“There are four CAAs in the state, one for each county: The Honolulu Community Action Program, Kaua‘i Economic Opportunity Inc., Maui Economic Opportunity Inc., and Hawai‘i County Economic Opportunity Council. 

“SB 75 appropriates $80 million to the County of Hawai‘i:

Community Assistance

• $28,038,653 for child care grants, household grants, technology improvements for rural areas to help support school closures and teleworking, student and senior technology tools, and homeless prevention.

Hawai‘i Island Recovery Initiative

• $22.3 million for grants and support for small businesses, agriculture, energy, restarts, startups, non-profits, and the business community.

Property Acquisition, Housing, and Construction

• $9.557 million for shelter needs for quarantine, homeless, contact tracing and services location, and other housing needs.

“SB 75 appropriates $66.5 million to the County of Maui:

Community Services

• $26 million for grants for households, small businesses, and child care (HELP, Micro Business Loan Program, farmers’ relief program).

Maui Recovery Initiative

• $4.5 million for recovery planning and incentives.

“The City and County of Honolulu received $387 million from the federal CARES Act:

Community Services

• $166 million for grants for households, small businesses, and child care.

Household Hardship Relief Fund Program

• $25 million in funds designed to support households economically impacted by the COVID-19 pandemic.

Small Business Relief and Recovery

• This program provides one-time reimbursement for expenses up to $10,000 to each qualified business that has less than $1 million in gross annual revenue and 30 or fewer employees. Eligible business types include non-profit organizations. Examples of expenses include rent, utilities, and payroll. The fund can also reimburse expenses incurred to implement physical distancing and other safety precautions to comply with business opening and operating guidelines.

 “SB 75 appropriates $28.7 million to the County of Kaua‘i:

Direct Assistance

• $1.5 million for food distribution.
• $2.25 million for mental health and domestic violence prevention grants to non-profits.
• $3 million for small business loan and other business support.
• $330,000 for non-profit food support.

Economic and Supply Chain Resiliency

• $3.5 million for agricultural infrastructure support.
• $250,000 for commercial fishing assistance.

“I ask my colleagues to join me in supporting SB 75, which provides funds to our neighbor island counties for relief, as well as makes the responsible decision of depositing the difference into the rainy day fund. SB 75 provides us with a plan that allows us to make better, smarter decisions when we attain new information from the Council of Revenues and we have more certainty about the actions from the federal government.”