The Budget Is Signed
by Tom Yamachika, President, Tax Foundation Hawaii
On June 30, Gov. Green hosted a signing ceremony on the fifth floor of the Capitol where he dutifully put pen to paper and signed into law the state budget, House Bill 300, and the tax credit bill, House Bill 954.
The budget, of course, was signed subject to line-item vetoing certain provisions, which we have discussed before.
At the ceremony, the Governor made clear that tax relief, especially for ALICE (asset-limited, income-constrained, employed) families, is still on the table. There will be a Phase 2, he said, apparently targeting the 2024 legislative session.
Large sums in the budget were directed to housing. For example, $280 million went to the Rental Housing Revolving Fund to develop more affordable housing, and $100 million went to the Dwelling Unit Revolving Fund to develop infrastructure and support for housing. The Hawaii Housing Finance Development Corporation (HHFDC) administers these funds.
Healthcare was another big target. The budget increased the provider reimbursement rate for Medicaid recipients, with $30 million in general funds paired with $42.8 million in federal funds to do this. $50 million is slated for improvements at Hilo Medical Center, $2.3 million for the Kona community hospital, and almost $30 million for state-owned hospitals generally (under the Hawaii Health Systems Corporation). Another $30 million went to a program that helps to pay off educational loans for those who care for patients in Hawaii, especially with our present shortage of healthcare providers.
Another $100 million went toward climate, energy, and environment. In this category, the largest line item was $50 million toward the Hawaii Green Infrastructure Authority’s Solar Energy Storage Loan Program to help ALICE families buy solar panels and energy storage systems. (In case you don’t remember the Hawaii Green Infrastructure Authority, look on your utility bill. There is a line item there for “Green Infrastructure Fee.” That’s them. They make loans to finance green energy projects, sometimes with no down payment required.)
One of the larger single items in the budget was a transfer of $500 million to the state’s rainy-day fund. As we mentioned before, the budget as passed by the Legislature allocated a billion dollars to the fund, but the revenue forecast by the state Council on Revenues dropped by a billion dollars, necessitating some changes to the budget in order to make it balance.
House Bill 954, which we have discussed before, temporarily (for five years) enhances some of the tax credits that are claimed by lower-income families. Obviously, it wasn’t the full economic package that the Governor was pushing for when he discussed the Green Affordability Plan in his State of the State address. But that’s just Phase One. Next year, the Governor plans to revisit adjusting state income tax brackets and personal exemptions and indexing them for inflation.
Now that the Governor has had some time to get (most of) his department heads and core team in place, he’ll have more time to get out in front of the public to push for Phase Two. We can look forward to that for the next legislative session.