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The evidence is pouring in that Hawaii’s remarkable economic recovery is touching all bases.
The latest examples come from the state Legislature, which is not holding back spending.
The state Senate Ways and Means Committee report made clear last week there is plenty of money.
After years of watching state programs be cut, Ways and Means Committee Chairman Sen. Donavan Dela Cruz can now write in his committee report that money was again flowing.
For example, Dela Cruz’s committee added $315 million for affordable housing programs and $60 million for the Hawaii Tourism Authority.
There was also wide acknowledgement that Hawaii was on the receiving end of major federal help from the new U.S. recovery act.
The action came as the Legislature “continued to manage the daunting task of balancing the state budget with the remainder of the $1,600,000,000 allocated to the state through the American Rescue Plan Act of 2021,” the committee report said.
That is correct: one billion, six hundred million dollars.
Couple that to a general excise tax system that contributes with every economic uptick and the state is in a position to be spending much more.
“Strong revenue collections were attributed to a high number of visitors to the islands, increased consumer spending, additional tax collections due to inflation, and the benefit of having a larger share of the transient accommodations tax remain in the general fund,” Dela Cruz explained in the report.
The Senate calculations are tracking two recent state Council on Revenues reports, saying “due to the rebounding of the economy and increased tax collections, the state could expect a 6.0% increase in the fiscal year 2022 general fund tax revenues.”
The Senate budget message also mentions some of the usual expenses that are required to run the state of Hawaii. Much of the spending is for the rarely discussed expenses to hire and maintain state employees.
For instance, the Senate budget notes that for fiscal 2023, $350 million was included for retirement benefits and another “$335,068,000 in fiscal year 2023 for health premium payments.”
The COVID-19 virus continues to be a major new cost for the state, according to the Senate budget. The committee report puts the costs at “$99,433,565 in general funds in fiscal year 2022 and $71,000,000 in general funds in fiscal year 2023” for COVID-19 pandemic mitigation.
The Senate version of the budget is not expecting any opposition and lawmakers have little time before the Legislature’s scheduled May 5 adjournment.
The only real questions are whether the state can actually spend all that new money, and whether there is adequate supervision to do it properly.
Richard Borreca writes on politics on Sundays. Reach him at 808onpolitics@gmail.com
