Green's line-item vetoes in the hands of lawmakers

by Kim Jarrett, The Center Square, June 14, 2023

Hawaii lawmakers have ten days to decide if they want to keep $1 billion in cuts made by Gov. Josh Green.

The governor said he had to make the cuts after lawmakers passed the budget after Hawaii's revenue projections for fiscal year 2023 fell from +2% to -1% in May.

“Our state laws and policies require me to balance the budget and ensure that the state has adequate reserves to protect against budget shortfalls and provide financial stability and flexibility during volatile times and natural disasters,” Green said. “A sound budget and appropriate reserve levels are also needed to help maintain strong bond ratings that can positively affect borrowing costs associated with our capital improvement projects.”

The most significant cut to the biennium budget is the reduction in $500 million allocated to the state's emergency budget reserve in fiscal year 2025. The state would still have $1.5 billion in the fund.

Also on the governor's chopping block is $12 million for a new Hawaii Emergency Management Agency headquarters. A program for housing teachers was slashed from $170 million to $50 million.

After the cuts, the state's $10.7 billion budget is still higher than the fiscal year 2023 budget of $9.1 billion. More than $18 million in improvements to Honolulu's Kakaʻako Street were removed from the fiscal year 2024 budget.

Green said the state will still make progress on his priorities.

"I considered the needs of the community to make sure we are still making large strides in moving the state forward,” Green said. “Even with this year's proposed reductions, this budget makes historic investments in housing, homelessness, environment, healthcare, and education.”

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CHAIR OF THE SENATE COMMITTEE ON WAYS AND MEANS DONOVAN DELA CRUZ ISSUES STATEMENT ON GOVERNOR'S ANNOUNCED INTENT TO LINE-ITEM VETO AND LINE-ITEM REDUCE THE STATE BUDGET

News Release from Hawaii State Senate Democratic Caucus, June 14, 2023

Honolulu, Hawaiʻi – Chair of the Senate Committee on Ways and Means Donovan Dela Cruz (District 17 - Portion of Mililani, Mililani Mauka, portion of Waipi‘o Acres, Launani Valley, Wahiawā, Whitmore Village) issued the following statement on Governor Green's announced intent to line-item veto and line-item reduce the State budget:

"The challenge we face with crafting the State budget is that it’s built upon “point-in-time” revenue projections. From March to May, the Council on Revenues forecast dipped a total of $292M and $302M in FY24 and FY25 respectively. The reduction in expected revenues places the Governor in a difficult position, requiring him to make tough fiscal calls on what can stay in the budget and what will need to wait and be worked on next session.

Regarding funding for the First Responders Technology Campus, I met with the Governor over the weekend to discuss the line-item vetoes. We look forward to working together during the interim to address the State's needs to relocate and modernize our First Responder's critical infrastructure next session. He assured me he is committed to finding alternatives to address the challenges.

I look forward to developing a path forward with the Administration on determining if the land in the Mililani Technology Park should pivot and be used for in-door farming, ag-tech, and value-added food production."

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GOV. GREEN ANNOUNCES LINE-ITEM VETOES, REDUCTIONS FOR STATE BUDGET

Office of the Governor Press Release, Jun 14, 2023

HONOLULU, HI – Governor Josh Green, M.D., notified the Legislature of his intent to line-item veto and line-item reduce House Bill 300, the General Appropriations Bill of 2023, to balance the financial plan. This bill appropriates funds for Fiscal Biennium 2023-2025, to fund operations and capital improvement projects of Executive Branch agencies and programs.

The change in the Council on Revenues general fund projections for Fiscal Year 2022-2023 went from +2% in March to –1% in May, which prompted the need to rebalance the state’s financial plan through line-item reductions to the budget. To balance the financial plan and meet the reserve policy for the state, Governor Green needed to reduce approximately $1 billion from the budget bill over the Fiscal Biennium 2023-2025.

“Our state laws and policies require me to balance the budget and ensure that the state has adequate reserves to protect against budget shortfalls and provide financial stability and flexibility during volatile times and natural disasters,” said Governor Green. “A sound budget and appropriate reserve levels are also needed to help maintain strong bond ratings that can positively affect borrowing costs associated with our capital improvement projects.”

Governor Green’s actions will protect essential services, core programs, and will continue to make significant investments in priority areas for the state.

“I considered the needs of the community to make sure we are still making large strides in moving the state forward,” said Governor Green. “Even with this year’s proposed reductions, this budget makes historic investments in housing, homelessness, environment, healthcare, and education.”

Many of the items that were reduced require additional planning, public input, and clarity on the use of funds. Consideration was also given to the departments’ capacity to spend down the funds efficiently within the appropriation timeline, and in many instances, smaller amounts of funding were provided so that the initial work of important projects and programs could begin.

The line-item reductions and vetoes in House Bill 300 are listed below. Please note attached spreadsheet.

• Reducing $4 million in FY24 from Enterprise Technology Services for Relocation of Data Center; leaving $1 million
• Reducing $1.05 million in FY24 from Department of Accounting and General Services Public Works Division for Proof of concept and master planning
• Reducing $500K in FY24 for Enterprise Technology Services relocation of Mapunapuna Baseyard
• Reducing $50M in FY24 for the First Responder Tech Park
• Reducing $1.5M in FY24 for East Kapolei Infrastructure; leaving $500k
• Reducing $18.5M in FY24 for Kakaʻako Street Upgrades
• Reducing $42M in FY24 for Kalaeloa electric upgrades; leaving $5M
• Reducing $61M in FY24 for Iwilei-Kapālama infrastructure; leaving $25M
• Reducing $88.8M in FY24 for irrigation infrastructure; leaving $5M
• Reducing $5 million in FY24 from Department of Agriculture Mitigation and Population Control of Feral Animals (Department of Land and Natural Resources will undertake this work)
• Reducing $2M in FY24 for Department of Business, Economic Development, and Tourism Hawaiʻi Center for Advanced Transportation Technologies for energy tech, microgrid, and other related programs; leaving $2M
• Reducing $33M in FY25 for Broadband Federal Matching; leaving $33M in FY24 for state match
• Reducing $500M in FY25 for the Emergency Budget Reserve Fund; leaving $500M in FY24 to meet reserve target
• Reducing $50M in FY24 for Hawaiʻi Green Infrastructure Authority solar energy storage loan program; leaving $50M in FY24 to launch program
• Reducing $12M in FY24 for the Department of Defense; plan, design, construction, and equipment for new headquarters
• Reducing $120M in FY24 for Teacher Housing; leaving $50M in FY24 to launch program
• Reducing $3M in FY24 for Department of Human Resources and Development Computer Equipment
• Reducing $5M in FY24 for Department of Law Enforcement Training Center for New Building
• Reducing $5M in FY24 for Department of Land and Natural Resources for forestry resource management; leaving $20M in FY24
• Reducing $25M in FY24 for State Parks renovations and improvements; leaving $25M in FY24
• Reducing $100K in FY24 for Kawehewehe Waikīkī Boardwalk
• Reducing $60.2M in FY24 for Department of Land Division of Boating and Ocean Recreation

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