Senate Committee on Ways and Means Passes Fiscally Responsible State Supplemental Budget Bill Following Changes in Economic Outlook

Following lower tax revenue projections, the Senate Committee on Ways and Means today passed a fiscally responsible HB1700 HD1 SD1, the supplemental appropriations act of 2014, which includes less spending while continuing to support education, health, human services, the environment and public safety. The bill adjusts appropriations for the operating and capital improvement budgets of the Executive Branch for Fiscal Biennium 2013-2015.

Compared to the Governor Neil Abercrombie’s budget proposal, for FY2013-2014, the Senate’s version of the bill reduces all funds by $46.1 million, inclusive of a general fund reduction of $45.8 million. For FY2014-2015, the bill reduces all funds by $167.9 million, inclusive of a general fund reduction of $158.7 million.

“As we did last year, the Senate displayed fiscal restraint. Given weak revenue projections, we made smart policy decisions by taking a conservative and responsible approach to the supplemental budget,” said Sen. David Ige, chair of the Senate Ways and Means Committee.

On March 11, 2014, the Council on Revenues reduced its projected general fund tax revenue growth, from 3.3 percent to zero percent in FY2013-2014 and 7.4 percent to 5.5 percent in FY2014-2015. Combining this with the Department of Budget and Finance’s estimated reduction of general fund non-tax revenue growth, it’s projected that there will be a cumulative total of $491.8 million less in general funds over the current fiscal biennium.

The bill does not include funding for certain administration requests that are intended to be funded under other appropriation measures, including joint majority package bills. Sen. Ige said that these reductions should not be counted as actual “savings.” The reductions include $33.5 million for the UHPA salaries, $1.0 million for the Hawaii Invasive Species Council, and $4.9 million for Kupuna Care and other senior citizen programs.

“We wanted to take prompt action to ensure that there would be enough time in conference and continue discussions with our counterparts in the House,” added Ige.


The following are major general fund appropriations included in the Senate version of the bill:

Department of Education

    • $15.0 million for the weighted student formula;
    • $2.0 million for the Strive HI school performance improvement system;
    • $2.0 million for student athletics.

Office of Early Learning

    • $5.7 million for early learning pilot projects, including the pre-kindergarten and family child interactive learning projects.

Department of Human Services

    • $3.0 million for Preschool Open Doors;
    • $1.5 million for Housing First; and
    • $5.5 million (plus $2.9 million in federal funds) to adjust to the monthly foster families board rates.

Department of Health

    • $3.2 million for home and community based services waiver for the developmentally disabled; and
    • $1.2 million for early intervention services contracts for infants and toddlers.

Hawaii Health Systems Corporation

    • $4.5 million to replace lost federal funds.

Department of Land and Natural Resources

    • $1.5 million for the Conservation and Resource Enforcement Unit.
    • $2.5 million (plus $1.0 million in special funds) for the watershed program;
    • $100,000 (plus $3.9 million in special funds) for the bid to host the International Union for Conservation Congress in 2016; and

Department of Public Safety

    • $2.0 million in program costs, which may be used at the discretion of the Department for such programs as the justice reinvestment initiative;
    • $786,718 for mental health care positions; and
    • $519,860 for suicide/hospital watch positions.

University of Hawaii

    • $5 million and 89 positions for the University of Hawaii, West Oahu;
    • Adding $47 Million and $9.2 Million in revolving fund for various programs for UH Manoa;
    • $9.3 Million in special funds for various programs for the University of Hawaii, John A. Burns School of Medicine;
    • $2.0 Million for various programs at UH Hilo; and
    • Adding 50 positions for community colleges

The following are Capital Improvement Project (CIP) highlights:

Department of Education: $638 million

University of Hawaii: $625 million for College of Pharmacy, restore health and safety funding, provide repair and maintenance funding

Department of Transportation

    • Reduced funding in all areas for new project, plus additional appropriations to existing projects
    • Revenue bonds reduced by $430 million from executive request
    • Federal funds reduced by $220 million from executive request


Statement from Sen. David Ige on Nearly $500 Million in Projected Revenue Loss

“Based on the latest report, we can clearly see that almost half a billion dollars has been cut out of the Governor’s budget, which will now be in the negative in fiscal year 2015.  We will have to take a closer look at his requests and what areas we need to cut in order to end the day with a balanced budget.

“As we initially anticipated, the touted $844 million surplus has evaporated due to this latest projection.  Last year we wanted to be cautious about what we funded and ended the session supporting many pilot projects instead of establishing new programs that we may not have been able to sustain. This latest forecast justifies that approach, and had we funded those programs, we would be forced to cut them this year based on these figures.

“I do not believe that we need to dip back into the State reserves to balance the budget, but clearly any additional request by the Governor will need to be reexamined.”

Sen. David Ige, chair of the Ways and Means Committee


Budget Briefings Commence at the State Capitol

The Hawaii State Senate Committee on Ways and Means and House Committee on Finance held a joint informational briefing this afternoon regarding Governor Neil Abercrombie’s Financial Plan and the Council on Revenues’ projections, commencing the first in a series of upcoming budget briefings to review the Executive Supplemental Budget for the 2013-2015 Fiscal Biennium.

View the current list of the upcoming briefings, at:

Senator David Ige Issues Statement on Executive Supplemental Budget Proposal

Honolulu- Governor Neil Abercrombie submitted to the state Legislature today the Executive Supplemental Budget for the 2013-2015 Fiscal Biennium and updated Program and Financial Plan for 2013-2019.

Senator David Ige, Chair of the Senate Committee on Ways and Means, issued the following statement in response to Governor Neil Abercrombie’s proposed supplemental budget:

We look forward to reviewing the Governor’s supplemental budget request,” said Senator David Ige. “Our first priority is to maintain the state’s fiscal health and budget reserves. We understand that the Governor’s proposed budget substantially increases general fund appropriations; moving forward we must be cognizant of and monitor general fund tax collections. The Council on Revenues will update its general fund revenue forecast in January. The Legislature will need to consider the Governor’s supplemental budget request against the updated Council on Revenues’ general fund revenue projection. The Legislature will conduct budget briefings early this year, commencing on Wednesday, December 18, to ensure adequate time is available to review the Governor’s supplemental budget request.”

Senator David Ige Responds to Governor Signing of Fiscal Management Measures

Honolulu- Governor Neil Abercrombie today signed into law today measures critical to paying down the State’s unfunded liabilities and replenishing the hurricane and rainy day funds.

The Hawaii State Legislature worked collaboratively during the 2013 Session to fulfill its commitment to paying down the State’s unfunded liabilities pertaining to other post employment benefits. The Legislature made appropriations to begin payment to these unfunded health benefit liabilities through the State Budget with $100M for FY14 and $117.4M for FY15.

Currently, the unfunded liabilities for the employer-union health benefits trust fund is $13.6 billion.

House Bill 546, Relating to the Hawaii Employer-Union Health Benefits Trust Fund (EUTF), will make Hawaii the first state in the nation to statutorily require payment of the annual required contribution for future public worker health benefits.

Paying down these liabilities will have a positive impact on the state’s bond rating and ensure that Hawaii’s future is not handicapped by increasingly burdensome debt,” said Senator David Ige, chair of the Senate Committee on Ways and Means.  “We have also set up a solid framework for future payments which demonstrates the legislature’s commitment to address the unfunded liability of the EUTF. “

The Governor also enacted two measures making general fund appropriations to recapitalize the State’s hurricane reserve trust and emergency and budget reserve funds, funds which were used to help balance the budget during the Great Recession.

During the Great Recession, as one of the alternatives to a general excise tax increase, we borrowed money from the hurricane fund and rainy day fund to balance the budget.  We had always intended to repay those funds so that the proceeds would be available again for future contingencies,” explained Ige.  “These bills demonstrate our commitment to recapitalizing those funds to build healthy reserves.”

Senate Bill (SB) 1094 makes a general fund appropriation of $50,000,000 for fiscal year 2013-2014 to recapitalize the hurricane reserve trust fund.

SB 1092 makes a general fund appropriation of $50,000,000 for fiscal year 2013-2014 to recapitalize the emergency and budget reserve fund.

Senator Michelle Kidani’s Floor Remarks on House Bill 200, the Hawaii State Budget

On April 3o, 2013, Senator Michelle Kidani, who serves as vice chair of the Senate Committee on Ways and Means and oversees Capital Improvements Projects for the Senate, offered the following remarks in support of House Bill (HB) 200, the Hawaii State Budget:

Senator Michelle Kidani, vice chair of the Senate Committee on Ways and Means, offers remarks in support of House Bill 200, the Hawaii State Budget.

Thank you Madam President. I rise in support of this measure.

This past session has been an interesting one to say the least. I say this because of how different this year has been from the last several, in which the State was dealing with the economic crises that gripped our economy and affected the entire nation. In the last few years, the creation of the CIP budget was driven in large part by the need for us to step in to provide that shot in the arm, that boost, to get things rolling again. The thought then was to get people back to work, to maintain and improve what we already had, while planning for the future needs of our state.

Now, thankfully, our economy is slowly improving and we have a job market, especially– in the construction industry–that is rebounding.

I said earlier that this year has been an interesting one. In some ways, the prioritization and vetting process done for the CIP budget was more difficult than in past years. This bill will fund thousands of worthwhile and critically needed projects; projects that will impact the lives of our residents now, and for many years to come. However, this bill is not perfect. There are projects, while valuable, while needed, while important for our state, we were not able to fund this year. These decisions were asked were made after doing our due diligence, being thoughtful, careful and mindful of our responsibilities.

HB200 CD1 proposes a CIP budget for Fiscal Biennium 2103-2015 in the amount of just over $3 Billion, of which $1.36 billion is funded by General Obligation or Reimbursable Bonds.

We will continue the progress made in renovating, repairing and maintaining existing state-owned facilities to utilize our current resources and reduce general fund expenditures in the future.

The CD proposes nearly $400 million to fund these types of projects for the Department of Education, Department of Health’s Waimano Ridge facility, Hawaii Health System Corporation’s network of hospitals, and hundreds of other projects in the UH system, DLNR, and DAGS.

We also looked at previous requests to fund aging infrastructure to move people, goods and materials which has been in disrepair or unusable. To address this we focused considerably on transportation. The basics… repairing our highways, expanding our harbors, and renovating and modernizing our airports.

Approximately $1.2 billion is appropriated for the Department of Transportation for projects such as $70 million for the expansion of Kona International Airport to meet the requirements of increasing visitor arrivals. Another $140 million is included for Honolulu International Airport, for improvements and upgrades for the main gateway to our state.

We are also supporting increased capacity at our harbors, statewide, to handle the import and export of goods and products, as well as dozens of highway improvements and bridge repairs. These projects will continue the process of addressing the declining conditions of our highways and transportation infrastructure.

Another priority was to designate appropriations for projects needed to address future capacity needs and economic growth.

HB200 CD1  includes $38.2 million to build an Advanced Technology and Science Center at Honolulu Community College and $11.8 million for a dedicated facility for the Allied Health program at UH-West O`ahu.

Additionally, funding for the renovation and expansion of the Foreign Trade Zone facility was included to keep this business incubator functional.

We also appropriated $18.4 million for Ewa Makai Middle School, to complete the campus and reduce overcrowding in schools in the Ewa plain.

There is always much talk about keeping agriculture land in agriculture and an opportunity arose to purchase over 20,000 acres of Dole Foods agriculture land on the North Shore of Oahu.  The Senate included $175M in Revenue bonds and $12.5M in G.O. bonds to take advantage of this opportunity.

This bill also invests in the State’s aging and obsolete IT infrastructure by appropriating over $130 million for informational systems to begin the process of creating a statewide information network,  streamline tax collections, maintain and share critical health information, as well provide for a secure communication network for the islands.

One of these is the Trans-Pacific cable project. By 2015, the state will be close to reaching full capacity of its existing broadband network. In addition, Hawaii is being bypassed as a vital communication hub in the Pacific. This project will begin to address these concerns and move Hawaii to the forefront in telecommunications technology.

In closing, I would like to thank Senate President Kim, Chair Ige, and our counterparts in the House for their support and hard work in crafting this CIP budget.  I believe we all look forward to the positive impact this budget will have on the State.


Collaboration Leads to the Conclusion of Budget Meetings Ahead of Deadline

House and Senate Conference Leaders Announce $3 Billion in Capital Improvement Projects

Honolulu – Lead Senate and House negotiators on the State Budget bill announced they closed negotiations three days ahead of an internal deadline.  Discussions between the Senate and House on finalizing the budget started well ahead of schedule this year, marking a paradigm shift in the approach taken to complete the work of the legislative session.

“The House and Senate committed to working together to finish the budget ahead of schedule,” said Senator David Ige, chair of the Senate Committee on Ways and Means.   “By completing work on the budget early, we have more time to consider the state financial plan and make thoughtful decisions on what bills should move forward.”

Finishing work on the budget early also creates a better environment for Senate and House negotiators working on other measures.  Rational decisions can now be made without the immense pressure of looming deadlines.  The conference committee meetings for the State Budget began nearly a week earlier than normal to avoid the last minute rush to get conference bills out for final vote.  This is a marked change from the last minute rush of typical legislative sessions.

One of the items that the two sides were able to come to agreement upon was a balanced reduction of vacancies throughout state departments in order to cut costs and ensure accurate financial reporting. After considering input from the departments, the two Chairs announced that roughly 200 positions—down from the proposed 1,000—will be reduced to save nearly $8 million.

“Chair Ige and I believe that in order to efficiently and effectively use state resources, the departments need to instill a sense of accountability and responsibility in their management of vacant positions. We have made it very clear that the Legislature wants to have all departments accurately use money we give them for its intended purpose and not for other things,” said Representative Sylvia Luke, chair of the House Finance Committee.  “I would like to really thank them for understanding what we are trying to accomplish and for providing information to ensure that the most effective decisions are made in staffing.”

On the opening day of the conference committee for the state budget, the chairs agreed to appropriate $100 million for fiscal year (FY) 2014 and $117.4 million for FY 2015 to begin payments on the unfunded liabilities.

Currently, the unfunded liabilities for the employer-union health benefits trust fund is $13.6 billion.

Over the upcoming fiscal biennium, the Legislature’s final draft of the executive budget is more than $250 million under the Governor’s budget proposal.

Today, appropriations for Capital Improvement Programs (CIP) and grants for non-profits (Grant-In-Aid) were announced.  The committee funded $30 million in projects for non-profit organizations on every island in the state.

“In conferencing with the House members, the intent of this biennium’s CIP negotiations has been to identify what needs to be funded by the state, while staying within the executive bond issuance plan as much as possible. For General Obligation bonds, this was just over $1.32 billion for the biennium to cover projects related to agriculture, education, social services, and technology,” explained Senator Michelle Kidani, vice chair of the Senate Committee on Ways and Means who oversees Capital Improvements Projects for the Senate.

“This proposed budget keeps the CIP budget within the state’s debt ceiling and Executive Bond issuance plan,” said Representative Luke.”

On funding public school facilities, Luke said, “We have agreed to fund the Department of Education over $400 million for repairs, upgrades and issues that have plagued our educational facilities for many years. You can’t have a 21st century school with 20th century electrical wiring!”


House Bill 200, relating to the State Budget, will now go before the full House and Senate for a final vote.


See attachment for highlights of the Capital Improvement Projects (Pg 1)/ highlights of the Capital Improvement Projects (Pg 2).

See attachment for highlights of Grant-In-Aid recipients.


Leaders Highlight Agreement on Several Significant Budget Items

Honolulu, Hawaii – The conference meeting to negotiate differences in the state budget between the House and Senate was held a week earlier than normal to allow more discussion time for conference members and avoid the last minute rush to act on other fiscal bills.

In his opening remarks today, Senate Ways and Means Chair, David Ige said, “This is an historic convening of the conference committee.  I cannot ever remember beginning this early in the session on the budget.  I would like to commend the House for its quick action and work in passing the budget over to the Senate early, and the Senate was inspired to do likewise.”

House Finance Chair, Sylvia Luke acknowledged the leadership of Senate President Donna Mercado Kim and House Speaker Joseph M. Souki “in making it possible for us to start the conference meetings early.”  Luke added, “Today we are not only ready to officially open conference meetings, we are ready to make significant decisions.”

Of the thousands of budget items facing the conference committee, two-thirds of them have already been agreed between what was contained in the House and Senate drafts of the budget.

Today, the chairs agreed to appropriate $100 million for fiscal Year (FY) 2014 and $117.4 million for FY2015 to begin payments on the unfunded liabilities.  Currently, the unfunded liabilities for the Employer-Union Health Benefits Trust Fund is $13.6 billion.

We believe that paying down the State’s unfunded liabilities must be a priority and can no longer be left to discretion,” said Senator Ige. “Additionally, this will put the State at the leading edge of national efforts to address this issue.”

Also today, the committee agreed on appropriating about $1.2 million each year to the Charter School Commission.  This appropriation would add 15 positions.

We both agreed to fully fund the Charter School Commission to ensure that they do have the resources to conduct the audits, to establish the performance contracts, to really do the public’s business to ensure that the public charter schools are capable of providing quality educational services to our children,” said Representative Luke.

The two sides also resolved differences on four other items today.

  • An allocation of $1 million to sustain the Hawaii Health Information Exchange (HHIE) contract for FY14. The HHIE is a local non-profit organization designated by the State of Hawaii to build the statewide health information exchange, a secure electronic network that allows health care providers to transmit patient medical information more efficiently.
  • Protection against invasive species by providing $750,000 in each of the next two years for the Hawaii Invasive Species Council. These funds will support a wide variety of invasive species prevention, control, and outreach projects across the state.
  • $4.7 million over the next biennium for risk management ensuring the state is adequately protected against catastrophic losses.
  • $700,000 for FY14 for the State Library System to purchase additional books, e-books, and other circulatory materials statewide.

Additionally, Ige and Luke highlighted some of the other notable budget items upon which there was agreement in the House and Senate budget drafts.

  • $1.2 million in special funds over the next biennium to fund seven new positions, including environmental health specialists and engineers. These positions will monitor watershed and surface water quality, the state water reuse and green house gas program, air pollution control programs and the enforcement of clean water regulations.
  • Approval of $126,400 for two juvenile parole officer positions on the neighbor islands which will help keep youth with their families instead of requiring them to relocate to the Oahu Youth Facility.
  • $135,000 to fund three animal disease inspector positions that will assist in controlling livestock diseases.
  • An appropriation of $327,000 over the next two years for the Automated Fingerprint Identification System and Facial Recognition System maintenance. This will enable all county law enforcement agencies to keep their systems running 24-hours 7-days a week.
  • $100,000 in general funds and $225,000 in federal funds to upgrade 120 emergency sirens around the state.
  • Support for veteran services by providing $870,000 for the next two years for five new counselor positions, burial service support, special housing for disabled veterans, and program operations.
  • $456,000 each year in federal funds for domestic violence prevention and support services.
  • An increase in the special fund ceiling by over $700,000 for eight new food sanitation inspector positions to address an increasing number of food safety violations on Oahu.
  • Over $2.2 million for both years to restore 32 custodial positions for the maintenance and upkeep of Honolulu International Airport. As the first and last place that visitors will see during their trip, it is important to create a pleasant impression for all visitors to Hawaii.
  • Nearly $81 million in FY14 for the repair and maintenance of our state highways.

The conference committee is scheduled to meet tomorrow, Friday, April 12 in conference room 309 at 2:30 p.m.


House Finance and Senate Ways and Means Leaders Schedule to Meet on Thursday, April 11

Honolulu, Hawaii – House Finance Chair Sylvia Luke and Senate Ways and Means Chair David Ige have announced that the first conference committee meeting on the state budget will be held on Thursday, April 11, 9:30 a.m. in room 309 at the State Capitol.

The conference committee meetings for the state budget are being held a week earlier than normal to avoid last minute rushes to get conference bills out for final vote.

“Both the Senate and the House moved quickly to get the budget moved out of their respective legislative bodies to get us into a position to negotiate differences a week earlier and allow for more discussion time.  This also allows the public the opportunity to better follow the work of the conference committee,” said Representative Luke.

“We look forward to working with the House to make strategic investments in our community and provide a solid financial foundation for the State,” said Senator Ige.

The House Conferees are:  Representatives Sylvia Luke, Chair; Scott Nishimoto, Aaron Johanson, Ty Cullen, Mark Hashem, Kaniela Ing, Jo Jordan, Bert Kobayashi, Nicole Lowen, Dee Morikawa, Richard Onishi, Gregg Takayama, James Tokioka, Justin Woodson, Kyle Yamashita, Beth Fukumoto, Gene Ward.

The Senate Conferees are:  Senators David Ige, Chair; Michelle Kidani, Suzanne Chun Oakland, Donovan Dela Cruz, J. Kalani English, Will Espero,  Gilbert Kahele, Gilbert Keith-Agaran, Ronald Kouchi, Russell Ruderman, Laura Thielen, Jill Tokuda, Sam Slom.

The meeting’s hearing notice can be found on the Capitol website.

Senator David Y. Ige’s Floor Remarks on the Senate’s Version of the Hawaii State Budget

During Session on April 4, 2013, the Senate voted to approve its version of the State Budget, House Bill 200. The Senate’s version of the bill took a cautious and conservative approach to the Governor’s executive budget, with a regard to government expansion and fiscal matters. The Senate’s version of the budget is approximately $134 M under from the executive request. The bill appropriates funds for the operating and capital improvement budget of the Executive Branch for the fiscal biennium years 2013-2015.

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