In his executive two-year budget released Monday, Gov. David Ige has included $9.5 million to help fund the takeover of Maui Memorial Medical Center by Kaiser Permanente Hawaii.

The funds, if approved by the Legislature, are for fiscal 2018, which begins July 1, 2017. The transition is also scheduled for July.

Ige also noted that there is money for separation bonuses for employees who will lose their public-sector jobs, although bonus amounts were not immediately released.

The transfer of operations of Maui Memorial Medical Center to Maui Health Systems, a Kaiser Foundation Hospitals LLC, from the quasi-public Hawaii Health System Corp., was supposed to occur July 1 this year. But a union court challenge and uncertainty over protecting public worker benefits forced the change back a year, resulting in a financial shortfall for the Maui Region hospitals, which also include Kula Hospital and Lanai Community Hospital.

State Sen. Gil Keith-Agaran, whose district includes Maui Memorial, said his understanding is that previous MMMC Chief Executive Officer Wes Lo noted at an October meeting that the hospitals would be around $9 million to $13 million short with the transition pushed into 2017.

Keith-Agaran recalled that the hiring of nurses and physicians would cost $5.65 million and reserves are being used to cover other costs of continuing operations resulting in the total shortfall of $9 million to $13 million.

He said that the funds, if approved, will be a reimbursement to HHSC.

“I’m very grateful that the Ige-Tsutsui administration has included proposals and resources that moves the transition to Maui Health Systems forward,” Keith-Agaran said. “The budget requests support the plans that the Maui Region and Kaiser are pursuing to fill the gaps during the delay.”

A spokeswoman for Maui Memorial Medical Center said late Monday afternoon that they were not aware of the specific budget request until a news release was sent out Monday.

The budget request came as Ige submitted his $28.5 billion executive biennium budget to the Legislature on Monday during a news conference at the state Capitol. Ige is proposing an operating budget of $14.2 billion for fiscal 2018 and a $14.3 billion budget for 2019.

“This budget proposal aims to balance our state’s current needs with our investments for the future — providing basic needs for our residents such as affordable housing, quality public schools, primary healthcare and essential social services,” Ige said in a news release following his announcement.

Among the highlights, he noted he is proposing $800 million for new schools and classrooms, as well as repair and maintenance of Department of Education campuses, University of Hawaii campuses and libraries.

He is also proposing $123.4 million in new housing projects and $59 million for public housing improvements, which he said the counties cannot do on their own.

Ige is continuing his push to fight homelessness by asking for $20.9 million annually for rent subsidies, supportive and outreach services.

Ige is also seeking more than $30 million for agricultural and natural resources and $31 million for sustainability initiatives.

In his budget presentation, Ige had two specific requests for Maui: $12 million to fund repairs for Iao Valley State Monument and $40 million for Kahului Airport, for work including gate improvements.

Iao Valley State Park suffered substantial damage from the raging Wailuku River on Sept. 13. The park, as well as the county’s Kepaniwai Park, which also sustained substantial damage, are both closed. Ige visited the area on Sept. 22 to witness the damage himself.

DLNR Maui District Superintendent Larry Pacheco said in October that  debris removal and cleanup will cost $300,000 to $400,000.  He said the entire project of re-creating and improving the park could cost between $6 million and $15 million.

* Melissa Tanji can be reached at mtanji@mauinews.com.