Navigating the NILe

by Tom Yamachika, President, Tax Foundation Hawaii

Back in 2020, an Arizona State swimmer named Grant House sued the NCAA in a landmark class action case alleging that the NCAA’s rules forbidding compensation for college athletes were illegal under antitrust laws.  The settlement of that lawsuit in 2025 cleared the way for college athletes to be compensated for their name, image, and likeness (referred to as NIL).

Of course, we in Hawaii need to be competitive nationally, so we need to pay some of our student athletes for their NIL.  Or so our University of Hawaii has been arguing.  And, as reported in the Star-Advertiser, our university has already committed to some $5 million in NIL payouts.

University officials began their journey navigating the twists and turns of the NILe environment by coming to our Legislature this past session with hat in hand, seeking $5 million.

A request for a budget line item to this effect made it into the House version of the budget, but it was swatted down in the Senate.  A separate House bill, HB 2384, made it all the way through the House but had a chilly reception, and no hearing, in the Senate.  And a compromise bill, SB 3263, tried to set up an endowment fund the income from which could be used for NIL payments.  It made it through a House-Senate conference committee, but university officials asked the House and Senate money chairs to scuttle the bill, contending that it would create more problems than it would solve.  A Senate floor vote then narrowly killed the bill, 11-12.

So, what is to become of NIL funding here in Hawaii?

According to UH’s athletic director Matt Elliott, “We’re in the budget process right now,” he said. “Our mindset is we’ve got to find those resources to cover those expenses. … We’ll find a way.”

Which means that although the Legislature tried to sink NIL funding, UH’s ship stubbornly refuses to go down.  “We can do this the easy way … or the hard way,” UH is saying.

During a hearing on another measure we were following, SB 2602, Senate Education Committee Chair Donna Kim pointed out multiple instances of UH pulling millions of dollars out from a block of money given for repairs and maintenance, and then repurposing them for other projects that UH was interested in — but were not repairs or maintenance.  One example is renovation of the Sinclair Library.

Is UH going to pull the same kind of stunt here?

We had previously written about UH’s Tuition and Fees Special Fund, which had an unencumbered balance of some $430 million.  SB 2602 was a bill to raid the fund and put excess moneys back into the General Fund (and thereby ease the pressure to raise additional money from taxpayers).  That bill died in this past legislative session when the House decided not to appoint conferees to work out the bill with the Senate.

At a hearing on that bill, UH President Wendy Hensel said, “I don’t want anybody to ask me for a dime when they have a dollar in their hand.  And I feel the same as we come to you and ask for funding.”

Fine.  UH, do what you promised.  Use that money.  No pulling from the repair and maintenance fund.  Use that fund to clear UH’s infamous backlog of repair and maintenance projects.  And, most of all, don’t use this as an excuse to ask lawmakers for taxing power (like the DOE did when they asked for and received the authority to impose school impact fees, which have been a disaster).