Hawaii climate change bill shelved amid federal cutting spree

A Hawaii House committee shelved plans to allocate rainy day fund interest to climate projects.

by Jeremy Yurow Court House News, March 18, 2025

HONOLULU (CN) — A Hawaii House committee punted a bill Tuesday that would have put millions in interest earned from the state's rainy day fund toward climate change projects, citing growing uncertainty over federal budget cuts by the Trump administration.

Senate Bill 1395, which crossed into the House this month, proposed putting roughly $60 million in annual interest generated by Hawaii's Emergency and Budget Reserve Fund toward climate mitigation efforts. The measure was part of Governor Josh Green's broader climate initiative aimed at generating between $100-200 million annually for climate adaptation and wildfire mitigation projects.

The legislation would have directed excess interest earned when the fund's balance surpassed a designated threshold into the general fund. In the following year, the governor would be required to request an equivalent amount be allocated toward projects that mitigate or adapt to climate change.

"I really think this is a novel way to fund these climate mitigation items," state Representative Mark Hashem, committee chair of Hawaii's House Committee on Water & Land, said. "Because of the federal situation that is going on right now, we don't have any clarity, and we're going to need all the cash that we can reserve."

Hashem said the bill remains alive and can be revisited in the next legislative session.

Hawaii's rainy day fund, currently holding approximately $1.5 billion, serves as a financial cushion for unexpected expenses and budget stabilization. The decision to defer SB 1395 reflects mounting concerns and uncertainty about what state programs will be affected by federal budget cuts. 

State Representative Della Au Belatti supported the deferral while emphasizing long-term concerns. "As long as we're appropriating the funds that are needed in the budget, then it makes sense not to scoop this money and say, specifically for climate mitigation and resiliency initiatives," she said.

But she also expressed apprehension about future federal environmental funding. "I'm very concerned that, as we move forward, we're going to see the federal budget gutted when it comes to environmental initiatives. This is a creative way [to combat that]. If this remains on the table as we move into the special session and the next year, I think it's really critical," she said.

The committee explored alternative funding mechanisms, including using Community Improvement Program funds and bond financing to support climate initiatives despite the bill's deferral.

The $60 million that SB 1395 would have generated, combined with an additional $80 million from a proposed transient accommodations tax increase, would have provided significant funding for climate initiatives. However, as Governor Green noted before the bill's deferral, these amounts still fall far short of the estimated $500 million needed annually for comprehensive climate adaptation across the islands.

This bill joins several other shelved initiatives this session, including an Office of Hawaiian Affairs proposal for residential towers in Kakaʻako Makai, a paid family and medical leave insurance program, universal free school meals, and electric bike regulations.

Meanwhile, many Hawaii Democrats, who hold a supermajority in the state government, have expressed interest in using state funds to offset potential cuts to federal programs supporting vulnerable populations through Medicaid and the Supplemental Nutrition Assistance Program.