Green signs tax breaks, budget
by Kim Jarrett, The Center Square, June 30, 2023
Hawaii Gov. Josh Green said Friday he would continue with his "Affordability Plan" announced earlier this year.
The governor signed House Bill 954, which would raise the size of the child and dependent care tax credit from $2,400 per one individual to $10,000. The credit increases from $4,800 to $20,000 for two or more taxpayers. The bill also doubled the food excise tax credit from a minimum of $35 to $70 and a maximum of $220 from $110. The earned income tax credit is doubled. The changes are for five years.
"It's too expensive to live in Hawaii for so many people," Green said. "Most of that has to do with housing, which we are addressing and which the Senate and House did an excellent job helping us to move the ball forward."
The bill is a positive step in addressing challenges faced by the "Asset Limited, Income-Constrained, Employed," known as "Alice," said Sen. Donovan Dela Cruz.
“By increasing the tax credits for household and dependent care services, refundable income, and income threshold and credit amounts for refundable food and excise tax, HB954 aims to provide much-needed support to working families," said Dela Cruz, a Democrat.
Green signed a multi-million housing package last week that includes $1 million to expand a rental assistance program for residents 62 and older and another bill that would build low-income housing on state land.
HB 954 provides $104 million in direct income tax relief. But it's just the first part of his "Affordability Plan," Green said.
"Over time, we would like to move more toward $250 million in tax breaks, that's what phase two will look like but this is an excellent start," Green said.
Green also signed the biennium budget, which includes $10.7 billion in general funds for fiscal year 2024 and $9.8 billion in operating funds for fiscal year 2025. The budget also allocates $19 billion in 2024 and $18.2 billion in 2025 for executive branch departments and agencies for the operating budget.
The governor cut the budget after Hawaii's revenue projections for fiscal year 2023 fell from 2% to -1% in May. The cuts included a $500 million reduction in the state's emergency budget reserve in fiscal year 2025. The state would still have $1.5 billion in the fund.
Also gone is $12 million for a new Hawaii Emergency Management Agency headquarters.
Green said he plans to continue to address the state's housing crisis. An emergency declaration is coming soon, he said.
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GOV. GREEN EXTENDS FAMILY TAX CREDIT, SIGNS $37.2B FISCAL BIENNIUM OPERATING BUDGET
Office of the Governor Press Releases Jun 30, 2023
HONOLULU, HI ̶ Governor Josh Green, M.D., today signed legislation to provide sweeping income support to Hawaiʻi’s working families, and to fund state operations for the coming fiscal biennium.
HB954 (Act 163) gives $104 million of income support to local taxpayers, many of whom will receive tax refunds worth thousands of dollars that will flow back into their household budgets to help make ends meet. The bill doubles the size of the Earned Income Tax Credit for five years, providing $50 million in additional support. The bill also doubles the amount of the Food Excise Tax Credit, benefitting an additional 90,000 of the most economically vulnerable residents in the state. Working families who struggle to pay for child or dependent care will receive a refundable credit of up to $3,000 to help ease the high costs of living they face every day.
“The people of Hawaiʻi honored me with this position in the hope that my administration would make their lives better. It is a top priority of mine, and it is thanks to the collaboration between my Administration and legislative leaders that our families will receive this relief,” said Governor Green.
“The budget and tax bills truly represent cooperation between the Administration, 76 legislators, and the general public,” said House Speaker Scott Saiki (District 25, Ala Moana Kakaʻako, Downtown). “They will deliver direct relief to over 200,000 families, our statewide parks and trails, our climate, and unsheltered individuals in need of mental health assistance.”
Senator Donovan Dela Cruz, chair of the Senate Ways and Means Committee, hailed the tax break bill as a positive financial benefit for struggling families.
“HB954 is a positive step towards addressing the financial challenges faced by the ALICE (Asset Limited, Income-Constrained, Employed) population in Hawaiʻi,” said Senator Dela Cruz (District 17, portion of Mililani, Mililani Mauka, portion of Waipi‘o Acres, Launani Valley, Wahiawā, Whitmore Village). “By increasing the tax credits for household and dependent care services, refundable income, and income threshold and credit amounts for refundable food and excise tax, HB954 aims to provide much-needed support to working families.”
Hawaiʻi Community Foundation CEO Micah Kāne believes the multi-faceted approach to relief for ALICE families will have a long-lasting impact.
“It was important for the Governor and the legislature to allocate resources for immediate relief for the families that addresses major cost-drivers, like early learning and affordable housing,” Kāne said. “You can’t really do one without the other; you have to do both. I think the Governor’s investment in affordable housing and continued commitment to early learning will reduce the ALICE numbers in the long run,” Kāne said.
Governor Green today also signed HB300 (Act 164), the state budget for the fiscal biennium. The budget appropriates $10.7 billion in FY24 and $9.8 billion in FY25 for general funds; $19 billion in FY24 and $18.2 billion in FY25 for Executive Branch departments and agencies for the operating budget. The budget also appropriates $2.9billion in FY24 and $1.3 billion in FY25 for capital improvement projects. Governor Green yesterday provided official notice to lawmakers, finalizing line-item reductions and vetoes.
“When we received the Council on Revenues’ lowered revenue projections, it was clear that we had to right-fit the budget to align with the priorities of our Administration and legislature ̶ housing, homelessness, health care services, education and the environment,” Governor Green said, noting that a balanced state budget is required by law.
“With the signing of HB300, the state budget bill, we can expect that the resources provided within it, coupled with the shared commitment of the legislature and the Governor, will allow for considerable progress to be made in addressing Hawaiʻi’s greatest challenges,” Senator Dela Cruz said. “Millions of dollars have been put forth to tackle homelessness, the housing crisis, mental health, and workforce shortages, to name a few.”
HB954 HD2 SD2 CD1, Relating to Taxation (Act 163)
Increases the household and dependent care services tax credit for five years. Increases the refundable earned income tax credit for five years. Increases the income thresholds and credit amounts of the refundable food/excise tax credit for five years. (CD1)
HB300 HD1 SD1 CD1, Relating to the State Budget (Act 164)
Appropriates funds for the operating and capital improvement budget of the Executive Branch for fiscal years 2023-2024 and 2024-2025. (CD1)
Here are the top 5 things to know about the budget:
1. Developing affordable housing and infrastructure.
Housing is at a crisis level in the state. Many families leave because they don’t have access to affordable housing and some even become homeless. This budget funds a multi-prong approach to build more units, provide subsidies to renters, and to develop much-needed infrastructure to speed up housing development. This budget appropriates $280M to the Hawaiʻi Housing Finance Development Corporation Rental Housing Revolving fund to develop more affordable housing units, $100M to the Dwelling Unit Revolving fund to develop infrastructure and support for affordable housing, over $70M to develop infrastructure, $50M for teacher housing, and $6M for the state rent supplement program to help eligible families pay part of their monthly rent.
2. Getting people the care they need.
This budget invests in Hawaiʻi’s people.
Access to high-quality, comprehensive health care services is vital for physical, social, and mental health. This budget increases the provider reimbursement rate for Medicaid recipients ($30M in general funds and $42.8M in federal funds each fiscal year). This means that thousands of low-income individuals and families will get better access to high-quality healthcare. This budget also appropriates $3.3M in FY24 and $4.5M in FY25 for the Child Wellness Incentive Program which will pay $50 to state Medicaid benefit recipients for each completed well-child examination. This will incentivize more care, early on, for our keiki which leads to healthier outcomes later in life.
We must address homelessness in Hawaiʻi, and it will take action, resources, and for us to work together to implement multiple approaches. This budget takes a multi-faceted approach to address homelessness by providing funds for family assessment centers ($3.1M), housing first and rapid re-housing programs ($15M), homeless outreach services ($3.5M), ‘ohana zones ($15M) and kauhale ($48M).
3. Expanding and improving our healthcare services.
To help recruit and retain the health care workers we need for our residents, we are making big investments ($30M) in the Hawaiʻi State Loan Repayment Program. This program helps pay off educational loans for healthcare workers, including social workers, therapists, and many others who care for patients in Hawaiʻi in areas where there is a healthcare shortage. This budget also makes large investments in our hospital system. We are appropriating $50M to expand the Intensive Care Unit and Medical Surgical Unit at Hilo Medical Center, $2.3M for the Kona community Hospital Pharmacy Expansion, and nearly $30M for Hawaiʻi Health Systems statewide to improve and renovate hospitals, including on our neighbor islands and in our most rural areas.
4. Preserving our islands for current and future generations.
Hawaiʻi is home to some of the most ecologically diverse areas in the world, and we must act to protect, conserve and manage the unique natural resources that make Hawaiʻi so special.
This budget appropriates over $100M towards the climate, energy, and environment. Substantial investments are made to protect our natural resources ($20M), restore our state parks ($25M) and ecosystems ($14.8M). We are also funding our Climate Change Carbon Smart Land Management Assistant Pilot Program, which promotes carbon sequestration through forest conservation, farmland preservation, and other regenerative land management practices ($2M). Lastly, we are appropriating $50M to the Hawaiʻi Green infrastructure Authority’s Solar Energy Storage Loan Program to increase loan opportunities for ALICE households for the installation of solar panels and battery storage systems ($50M).
5. Educating our keiki.
We know that early education for our keiki allows them to develop the skills and tools they need to succeed later in life. That’s why this budget provides $38.8M to the Preschool Open Doors Program which will expand assistance to eligible families to pay for preschool for 3- and 4-year-olds, and 36 positions and $3.9M in FY24 and 126 positions and $7.6M in FY25 for preschool teachers, educational specialists, and assistants for the EOEL Public Prekindergarten Program.
We also need to make sure we support all learners throughout their educational journey. This budget provides 13 additional positions and $1.2M for bilingual and bicultural school home assistants across schools statewide and $5M for classroom supplies to help our schools. In addition, Governor Green’s Administration will provide to our schools and university system, additional resources from the discretionary fund that the legislature made available. We know that education is one of the best investments and that we need to support our education system from keiki to college and beyond.
Photos and videos of today’s signings of HB954 and HB300 can be credited to Office of the Governor.
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CB: Hawaii Governor Signs Tax Relief And Budget Bills
SA: Gov. Green signs off on Hawaii budget
HTH: Citing Hawaii’s high cost of living, Green signs bill boosting tax credits for many