Ige Proposes Significant Spending Hikes to Operating, CIP Budgets

Hawai‘i will spend almost $2 billion more over the next two fiscal years than previously budgeted, assuming the Hawai‘i State Legislature approves the proposal Gov. David Ige announced Monday.

The State’s Operating Budget spending would increase by a total $491.5 million in FY 2020 and FY 2021 combined by way of bumps outlined in the Executive Supplemental Budget for Fiscal Biennium 2019–2021, with $62.5 million and $214.1 million coming out of the General Fund over the next two years, respectively. The rest of the money in FY 2021 would come from other financing sources.

The governor also proposed an extra $1.468 billion in Capital Improvement Budget spending during FY 2021.

Ige unveiled the proposed budget increases during a press conference Monday afternoon, saying they’re the result of strategic decisions born of favorable circumstances.

“We do believe that with the low interest environment and the state’s improved bond rating, this is the time to invest in critical infrastructure that’s been delayed or put off for many years,” Ige said.

The State announced its highest bond rating in history last week.

Adjusted budget numbers based on Ige’s proposal are as follows:

• Operating Budget FY 2020 — $15.695 billion
• Operating Budget FY 2021 — $16.197 billion
• CIP Budget FY 2021 — $2.624 billion

Ige named initiatives involving education, homelessness, affordable housing and sustainability as the primary beneficiaries of the extra spending.

Extra compensation for classroom teacher shortage differentials in public and charter schools represents the largest bump in operational spending on education, accounting for $44.5 million over the next two years.

The CIP would dedicate $220 million more in FY 2021 for improvements to school facilities, making the total amount designated for upgrades to more than $425 million.

Public housing projects and Department of Hawaiian Homelands Development projects are in line to receive an extra $20 million each based on Ige’s proposal.

“We will meet our goal of creating 10,000 new units by the end of 2020,” Ige said. “Since 2015, 8,700 new units have been build. Another 3,200 more are in production.”

An extra $5 million would go toward homelessness initiatives and several hundred thousand would be spent on both the development of the State’s Industrial Hemp Program and Rapid ʻŌhiʻa Death response.

Nearly $300 million would be dedicated to highway projects on Kaua‘i and O‘ahu.