School Non-Spending

by Tom Yamachika, President, Tax Foundation Hawaii

In this space, we have been writing a lot about grief caused by spending taxpayer money unwisely.

It turns out that lots of grief can also be caused by failure to spend it.

Recently, according to reporting by Civil Beat, the Department of Education approached the Department of Budget and Finance with a list of about $900 million in projects that it didn’t think it could move before the funding for the project ran out of time. You see, legislative appropriations have a shelf life, normally three years. Before the time is up, the agency doing the project normally needs to “obligate” the funds, meaning that it needs to be spending money on the project itself or it needs to be under contract with a person or company that is going to do the project. When the time limit is reached, the funding “lapses,” which means that the appropriation for the money disappears.  When that happens, the project can’t and won’t be done unless the legislature passes, and the Governor signs, another appropriation for the project. In other words, those folks who want the project to happen need to start over.

After the DOE and Budget & Finance had a discussion over that $900 million worth of projects, the list got whittled down to roughly half.  According to the DOE’s statement, it “submitted a list of projects totaling $465 million that it proposed be allowed to lapse to free up project funding for other state priorities.”  DOE explained that it prioritized projects for which construction has already started, projects which were ready to begin construction, and projects needed to comply with federal requirements such as those imposed by gender equity laws or the Americans with Disabilities Act.

Despite DOE’s desperate attempt to spin the issue, legislators were outraged.  Legislators all try to look good for their constituents by bringing home improvements to facilities within their respective districts.  Civil Beat quoted Rep. Sonny Ganaden, representing Kalihi, who was upset that DOE was proposing to lapse more than $57 million that was going to be spent at Farrington High School for new classrooms, a music building, a gymnasium, and related improvements.  He noted that his district contains three different schools with projects that are proposed to lapse, and basically accused DOE of discriminating against his district, which has a high percentage of low-income students.

You can see the lapse list here.  (I wonder if it’s me they’re actually after?  I see my elementary school, intermediate school, AND high school on the list.)

DOE perhaps could have turned around and blamed county permitting agencies for being too slow to cough up the permits that these projects needed.  Interestingly, however, it didn’t do that.  Other things happened, which may or may not be related.  A committee of the Board of Education, which was considering a $10,000 per year pay increase for Superintendent Keith Hayashi, narrowly deferred the proposal on a 3-4 vote.  The assistant superintendent in charge of facilities and operations, Randall Tanaka, was given the ax after a little less than four years in his position. 

This doesn’t sound like a case of the DOE getting stymied by external factors like county permitting. It sounds like there were some screw-ups at the DOE level, and Randall Tanaka is taking a fall as a result. (Of course, we can’t boot any civil servants; that would be way too hard.). Hopefully, this incident will motivate the DOE to build systems and processes sufficient to prevent similar incidents from happening in the future.