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


Senators Strike a Balance to Move Minimum Wage

Ways and Means Committee Approves SB 2609

The Senate Committee on Ways and Means today advanced an amended version of Senate Bill 2609, a measure that would incrementally increase Hawaii’s minimum wage from $7.25 to $10.10 by 2017.

The changes to the measure reflect the committees desire to strike a balance between concerns from advocates on both sides of the issue to ensure lawmakers craft a responsible bill that boosts the minimum wage while not hampering small entrepreneurs.

“Since last session, I have been in support of a minimum wage increase and have been working toward an accord. We’re at the midpoint of the legislative session and there are several moving vehicles and ideas for lawmakers to consider,” said Sen. David Ige, chairman of the Senate Ways and Means Committee. “I’m committed to ironing out the differences in opinion on this very important policy issue and am hopeful that we can strike a balance between all stakeholders so that we can come to an agreement by the end of the session.”

Senator David Ige, with prior concurrence from Sen. Clayton Hee, chair of the Senate Judiciary Committee, recommended the following amendments to the measure:

  • Delete the provision for authorizing the Department of Labor and Industrial Relations to adjust the minimum hourly wage to the nearest 5 cents based on the Honolulu region consumer price index
  • Delete the repeal of the tip credit
  • Add a blank amount tip credit

These amendments will allow lawmakers to further the discussion, consider new proposals such as a “poverty threshold” to help protect low-income workers, and work out specifics on the amount of the tip credit.

All but one committee member voted to pass SB2609 out of committee. While discussing the recommended changes to the bill, colleagues acknowledged Ige for his work to “strike a balance” and thanked all advocates in the hearing room for their patience and participation in the legislative process.

The measure will now go to the Senate floor for third reading where, if approved, will then move to the House for consideration. Senators are expected to take this bill up during a full floor session on Tuesday, March 4.


Senate Advances Measure to Provide for Emergency Funding to Kauai Hospitals

HONOLULU – The Hawaii State Senate today passed House Bill (HB) 3, to provide emergency funding to the Kauai Regional Health Care System of the Hawaii Health Systems Corporation (HHSC).

HB 3 appropriates $7.3 million for fiscal year 2013-2014 to sustain the HHSC Kauai Regional Health Care System.  The emergency funding will ensure that Kauai’s two critical access hospitals, West Kauai Medical Center and Samuel Mahelona Memorial Hospital, Kauai’s only inpatient psychiatric unit, long-term care operations and three physician clinics, will remain operational through the spring of 2014.

This measure is necessary to safeguard Kauai’s residents and visitors access to essential health care services,” said Senate Vice President Ronald D. Kouchi, who represents the islands of Kauai and Niihau.  “I strongly appreciate the Ways and Means Committee chair, Senator David Ige, and the Health Committee chair, Senator Josh Green, M.D., for recognizing the critical need for this emergency appropriation and the three Kauai House of Representatives, James Kunane Tokioka, Dee Morikawa, and Derek Kawakami for their diligent work in aiding the passage of this measure.”

The measure will now be sent to Governor Neil Abercrombie for approval.

Senators Discuss WSF with Public School Principals

Early this week, Senate Education Chair Jill Tokuda met with principals from the Leilehua-Mililani-Waialua Complex and Aiea-Moanalua-Radford Complex to discuss the impacts of the Weighted Student Formula (WSF). This week’s meeting was part of a set of statewide site visits the Senator is conducting this interim, as she meets with principals across the State to receive feedback and comments about the way public schools are funded through WSF. Area Senators Michelle Kidani, Glenn Wakai, David Ige, and Donovan Dela Cruz were also in attendance.

In 2004, the Legislature passed Act 51, which created the WSF with the goal of empowering Principals to act as the educational leaders of their schools. As the 10th anniversary of Act 51 approaches, the Senate Education Committee has been focusing on making sure that the significant reforms set forth in Act 51 have not only been put into place, but that the desired outcomes have been achieved.

Senate Ways and Means Committee Visits Hawai‘i Island

Senators visit the Pohoiki Swim Area and Boat Ramp. (L-R: Sen. Laura Thielen, Sen. Michelle Kidani, Sen. J. Kalani English, Sen. Donna Mercado-Kim, Sen. David Ige, Sen. Suzanne Chun Oakland, and Sen. Russell Ruderman.)

Earlier this week, the Senate Committee on Ways and Means, Hawai‘i Island Senators, and the Senate President conducted site visits across Hawai‘i Island. Led by Ways and Means Chair David Ige, Ways and Means Committee members, Hawaii Island Senators Malama Solomon, Josh Green, Gil Kahele, and Russell Ruderman, and Senate President Donna Mercado Kim toured and were updated on various programs, projects, and concerns.

While on Hawai‘i Island, Senators visited the Kona Airport, Judiciary Courthouse, Kona Community Hospital, UH Hawai‘i Community College Palamanui Site, Waimea Middle School, Puna Community Medical Center, Pahoa Public Library, Pohoiki Swim Area and Boat Ramp, Daniel K. Inouye College of Pharmacy Research Labs, UH Hilo Student Housing, Old Hilo Memorial Hospital, and Daniel K. Inouye College of Pharmacy Modules. They also held a community informational meeting at the Waimea Middle School cafeteria.

The Hawai‘i Island visit is part of a number of statewide site visits the Senate Ways and Means Committee will conduct this interim.

Senators tour the Kona Community Hospital.

Senators hold a community informational meeting at Waimea Middle School.

(Photos Courtesy: The Senate Ways and Means Committee.)

It’s Electrifying- Area Legislators to Hold Energy Focused Town Hall Meeting

Honolulu- A dialogue focused on clean energy, technology and local households is at the center of a town hall meeting being held by ‘Aiea and Pearl City area lawmakers on Thursday, August 15, 2013, at the Pearl Ridge Elementary School’s cafeteria at 7:00 p.m.

The impact of rising rates of traditional energy sources is being felt in the pockets of many of our local households, who are having to dig deeper and deeper to pay the monthly electric bill or fill up the gas tank, “said Senate President Donna Mercado Kim, who represents District 14 (Kapalama, ‘Alewa, Kalihi Valley, Ft. Shafter, Moanalua Gardens & Valley, portions of Halawa and ‘Aiea). “This meeting is the perfect opportunity for residents to learn about the different forms of clean energy available, so they can make informed decisions that will hopefully save them money in energy costs.”

Apart from the typical solar and photovoltaic (PV) approach, residents will be updated on other alternative energy technologies available for their homes as well as tax credits and financing options to help fund such systems.  Several electric vehicles will also be on site for residents to view and test drive the latest in vehicle technology.

In addition, information tables will be available, allowing for one-on-one questions with numerous industry professionals to help guide the residents in choosing the best energy saving technologies that are cost effective and tailored to their needs.

Guest speakers include representatives from the Hawaii Solar Energy Association, Hawaii Energy, and Hawaiian Electric Company.  The Department of Taxation will also be present.

The town hall is being hosted by lawmakers representing the ‘Aiea and Pearl City areas: Sen. David Y. Ige, Senate President Donna Mercado Kim, Rep. Aaron Johanson, Rep. K. Mark Takai, Rep. Roy Takumi, Rep. Gregg Takayama, and City Councilmembers Breene Harimoto and Carol Fukunaga.

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.

New UH Athletic Director Ben Jay to Share His Vision for the Sports Program

Honolulu – The University of Hawaii’s new Athletics Director Ben Jay will be talking about his vision for the UH’s sports program at a town hall meeting on Thursday, May 16, 2013. It will take place at Pearl Ridge Elementary School’s cafeteria at 7 p.m.

Recently, Jay sparked controversy among UH fans for his decision to change team names. He’s also brought attention to the poor state of the athletics facilities through twitter.

This will be a great opportunity for our constituents to hear how our new UH athletics director is going to improve the program and his vision for the future,” said Senate President Donna Mercado Kim, who represents District 14(Kapalama, ‘Alewa, Kalihi Valley, Ft. Shafter, Moanalua Gardens & Valley, portions of Halawa and ‘Aiea).

I encourage everyone to attend the town hall meeting to learn about the direction of UH Athletics and use this chance to engage in the discussion relating to the department,” said Sen. David Ige, who represents District 16 (Pearl City, Momilani, Pearlridge, ‘Aiea, Royal Summit, ‘Aiea Heights, Newtown, Waimalu, Halawa, Pearl Harbor).

The town hall is being hosted by lawmakers representing the Aiea and Pearl City areas: Sen. David Y. Ige, Senate President Donna Mercado Kim, Rep. Aaron Johanson, Rep. K. Mark Takai, Rep. Roy Takumi, Rep. Gregg Takayama and City Councilmembers Breene Harimoto and Carol Fukunaga.

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.

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