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Scaled-back state budget includes funds for hospital, jail

Gov. Ige releases proposal with sharp reductions in funding

Gov. Ige’s proposed budget includes $12 million — $6 million each fiscal year — for lump sum facility improvements and renovations to Maui Health facilities on Maui and Lanai. The Maui News / MATTHEW THAYER photo

Funding for hospital and harbor improvements and medium-security housing at Maui’s only jail made the cut in the governor’s latest budget proposal, which calls for sharp reductions amid a struggling state economy.

Gov. David Ige released his fiscal budget 2021-23 on Monday after scaling back both the operating and capital improvements program budgets to make up for the $1.4 billion shortfall expected in each of the next two years.

“This budget represents sudden, sharp reductions to revenues because of the pandemic’s impact on the state’s economy and the tax revenue that funds government services and programs,” Ige said in a news release Monday. “Our economy will recover, and the state’s budget will normalize if we contain COVID-19, preserving the health of both residents and visitors.”

Ige is asking for a total operating budget of $15.4 billion in fiscal year 2022 ($276.4 million less than the current fiscal year) and $15.5 billion in fiscal year 2023 ($171.8 million less).

The operating budget decreases health premium payments by $603.3 million and decreases retirement benefits funding by $19.2 million over the two fiscal years, among other changes.

The governor is also seeking $7.7 billion in general funds for fiscal year 2022 ($361.9 million less than the current fiscal year) and $7.8 billion in fiscal year 2023 ($249.6 million less).

As for capital improvement projects, he is requesting $1.2 billion in fiscal year 2022 and $1.1 billion in fiscal year 2023.

While departments had to cut back and focus on essential projects, funding was still included for some Maui County initiatives, including $63 million — $62,988,000 in revenue bond funds and $4,000 each in special funds, federal funds and private contributions — in fiscal year 2023 for Kahului Harbor improvements.

Another $12 million — $6 million each fiscal year — is proposed for lump sum facility improvements and renovations to Maui Health facilities on Maui and Lanai. Maui Health, an affiliate of Kaiser Permanente, took over operations of Maui Memorial Medical Center, Kula Hospital and Lanai Community Hospital but has still received a portion of state funding that is supposed to decrease each year. The hospital operator received $33.4 million in fiscal year 2018 and is projected to get $8.9 million in fiscal year 2023, according to the govenor’s budget request.

The proposal also asks to reappropriate $12.9 million in fiscal year 2022 to provide additional funding for medium-security housing at Maui and Hawaii community correctional centers. Maui Community Correctional Center has long suffered from overcrowding, with state officials promising future expansion.

Meanwhile, the state Department of Health’s CIP budget in the governor’s proposal also adds nearly $8 million in fiscal year 2022 for improvements at Kalaupapa.

Ige said that he may be seeking emergency appropriations in separate legislation for COVID-19 efforts, including vaccination, hospital surge staffing and the state’s Safe Travels program. Prior to receiving the new federal aid, the measures were expected to cost $205 million in fiscal year 2021 (beginning in January) and $182 million in fiscal year 2022.

The govenor added that Congressional action could have an impact on state spending and expressed hope that federal aid would allow the state to put off furloughs until later. He had announced earlier this month that state employees would have to take up to two days off a month starting Jan. 1, a move he expects to save the state $300 million if the furloughs go on for a year.

State lawmakers told The Associated Press that the federal relief bill passed by Congress later in the day offered the governor an opportunity to reexamine his proposals.

“We will be working very closely with him and departments to reevaluate and then come to some consensus on how we can work together to come up with a balanced budget,” said State Rep. Sylvia Luke, the chairperson of the House Finance Committee.

State Sen. Donovan Dela Cruz, chairperson of the Senate Ways and Means Committee, said he hopes the federal funds will change the budget outlook but he wants to see whether Congress may have imposed restrictions on how the money can be used.

More broadly, he said Hawaii’s leaders need to consider how to use the budget crunch to improve government.

“I just think that this is the opportune time for us to look at how we’re going to restructure or reinvent or modify government, especially because we’ve seen how government initially had a very difficult time in reacting to the crisis,” Dela Cruz said.

* Colleen Uechi can be reached at cuechi@mauinews.com. The Associated Press contributed to this report.

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