STAND.
COM. REP. NO. 1172
Honolulu, Hawaii
, 2025
RE: H.B. No. 300
H.D. 1
Honorable Nadine K. Nakamura
Speaker, House of Representatives
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Madame:
Your Committee on Finance, to which was referred H.B. No. 300 entitled:
"A BILL FOR AN ACT RELATING TO THE STATE BUDGET,"
begs leave to report as follows:
As introduced, the administration's operating budget totaled:
Operating
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
10,471,559,898 |
10,541,723,984 |
|
ALL MEANS OF FINANCE |
20,546,640,464 |
20,459,458,677 |
Capital Improvements
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
0 |
0 |
|
GENERAL OBLIGATION BONDS |
1,327,344,000 |
601,195,000 |
|
ALL MEANS OF FINANCE |
3,433,004,000 |
2,470,581,000 |
On February 18, 2025, the Governor notified the Legislature of requested adjustments to the executive budget. The administration's revised operating budget totaled:
Operating
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
10,519,904,900 |
10,572,868,063 |
|
ALL MEANS OF FINANCE |
20,614,223,896 |
20,499,921,519 |
Capital Improvement
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
0 |
0 |
|
GENERAL OBLIGATION BONDS |
1,373,444,000 |
601,195,000 |
|
ALL MEANS OF FINANCE |
3,479,104,000 |
2,470,581,000 |
Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs; Department of Corrections and Rehabilitation; Department of Budget and Finance; Department of the Attorney General; Department of Agriculture; University of Hawaiʻi System; Department of Hawaiian Home Lands; Department of Human Resources Development; Department of Accounting and General Services; Department of Law Enforcement; Department of Taxation; Department of Health; Department of Business, Economic Development, and Tourism; Department of Human Services; Department of Labor and Industrial Relations; Department of Defense; Hawaiʻi State Public Library System; Hawaii Housing Finance and Development Corporation; Executive Office on Early Learning; Hawaii State Energy Office; Hawaiʻi Community Development Authority; Statewide Office on Homelessness and Housing Solutions; Office of Planning and Sustainable Development; Stadium Authority; Hawaii Green Infrastructure Authority; Executive Office on Aging; Hawaiʻi Technology Development Corporation; State Council on Developmental Disabilities; Hawaii State Commission on the Status of Women; School Facilities Authority; Public Utilities Commission; John A. Burns School of Medicine University of Hawaiʻi at Mānoa; Board of Education; Hawaii Public Housing Authority; Agribusiness Development Corporation; Hawaii Correctional System Oversight Commission; Department of Water Supply, County of Hawaiʻi; Honolulu Board of Water Supply; Department of Water, County of Kauaʻi; Department of Water Supply, County of Maui; ABC Group; Responsive Caregivers of Hawaii; Behavior Analysis No Ka Oi, Inc.; Hawaiʻi Waiver Providers Association; Full Life; Hawaiʻi Oral Health Coalition; Arc of Kona; Catholic Charities Hawaiʻi; Hawaiʻi Island Community Health Center; Holomua Collaborative; Hawaiʻi Association for Behavior Analysis; The Nature Conservancy, Hawaiʻi and Palmyra; BAYADA Behavioral Health; Kauaʻi Island Utility Cooperative; Hawaii Dental Service; Special Education Advisory Council; Parents and Children Together; Hawaii Laborers & Employers Cooperation and Education Trust Fund; Care for ʻĀina Now Coalition; Planned Parenthood Alliance Advocates – Hawaiʻi; Hawaiʻi True Cost Coalition; Early Childhood Action Strategy; Hunt Development Group, LLC; Hawaiʿi Farm Bureau; Hawaiian Electric; Healthcare Association of Hawaii; Maui Health System; HPM Building Supply; Mana Up; Akaka Foundation; Autism Behavior Consulting Group; Hoʻomau Autism Services LLC; and numerous individuals.
Your Committee received testimony in opposition to this measure from the Drug Policy Forum of Hawaiʻi; Reimagining Public Safety in Hawaiʻi Coalition; and numerous individuals.
Your Committee received comments on this measure from the Office of the Governor; Hawaii Health Systems Corporation; Department of Education; Department of Transportation, Department of Land and Natural Resources; Early Learning Board; Kahoʻolawe Island Reserve Commission; Land Use Commission; Pakolea Support Services; Hawaii Disability Rights Center; Hawaiʻi Friends of Restorative Justice; Kualoa Ranch; Essential Access Health; Hawaiʻi Public Health Institute; Commit to Keiki; Hep Free Hawaii; Hawaii Appleseed Center for Law & Economic Justice; Hawaiʻi Children's Action Network Speaks!; ACLU of Hawaiʻi; and four individuals.
Your Committee on Finance finds that the indicators for the economic outlook of the State show relatively moderate growth. However, challenges remain as the State prepares to deal with potential impacts from changing federal policy.
On January 6, 2025, State Economist, Dr. Eugene Tian, briefed your Committee that while the state economy is buoyed by construction, real estate, and a stable labor market, it is still facing challenges, including:
(1) Higher than national average inflation;
(2) A shrinking labor force; and
(3) Slow visitor industry recovery.
On January 25, 2025, the U.S. House of Representatives passed a budget resolution that proposed a potential $2 trillion cut in federal spending impacting safety net programs such as Medicaid, Supplemental Nutrition Assistance Program (SNAP), and Temporary Assistance for Needy Families (TANF). Should these reductions come to fruition, the State will need flexibility in the budget to respond.
On February 28, 2025, the University of Hawaii Economic Research Organization (UHERO) warned that "Hawaii's economic growth is threatened by federal disruptions. While tax cuts may provide some stimulus this year, the Administration's actions—including tariffs, mass deportations, and spending cuts—will impose significant drag thereafter. The clearest near-term risk is federal layoffs, which will result in a loss of more than 2,000 local jobs, fully offsetting growth in construction and the lift from local tax cuts. Together with other federal policies, this places the Hawaii economy at risk of recession over the next few years."
In light of these concerns, your Committee focused
on core and safety net programs and prepared for flexibility within the budget
by providing:
(1) $200,000,000 in FY26 for deposit into the Emergency and Budget Reserve Fund;
(2) $465,084 and five positions in FY27 for Office of Federal Awards Management;
(3) $20,990,000
in FY26 and FY27 for summer school;
(4) $10,000,000
in FY26 and FY27 for skilled nursing services;
(5) $80,545,000 in FY26 and $69,597,400 in FY27 for Hawaii Health Systems Corporations Regions and implementation of Epic Systems for East Hawaii;
(6) $12,000,000 in FY26 and $6,000,000 in FY27 for Maui Health System;
(7) $1,838,210 in FY26 and $3,305,926 in FY27 and twenty-one positions for certified community behavioral health clinic certification for Oahu, Maui, Hawaii, and Kauai Community Mental Health Centers;
(8) $13,000,000 in FY26 and FY27 for locum tenens contracts for Hawaii State Hospital;
(9) $1,700,000 in FY26 and FY27 for contracted services for family planning and preventative health services;
(10) $250,000 in FY26 and FY27 for the State Rent Supplement Program;
(11) $250,000 in FY26 and FY27 for the federal Section 8 Program;
(12) $3,750,000 in FY26 and FY27 for the Housing First Program;
(13) $3,750,000 in FY26 and FY27 for the Rapid Re-Housing Program;
(14) $6,500,000 in FY26 and FY27 for Applied Behavioral Analysis to increase provider payment rates;
(15) $29,455,181 in FY26 and FY27 to sustain increased reimbursement rates for most medical professional services; and
(16) $605,000 in FY26 and FY27 for Family Resource Centers.
Upon consideration, your Committee has amended this measure by:
(1) Appropriating the following for operating and capital improvement expenses:
Operating
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
10,668,359,711 |
10,519,050,655 |
|
ALL MEANS OF FINANCE |
20,484,862,473 |
20,216,604,470 |
Capital Improvements
|
|
FY 2025-2026 |
FY 2026-2027 |
|
GENERAL FUNDS |
0 |
0 |
|
GENERAL OBLIGATION BONDS |
1,453,490,000 |
446,559,000 |
|
ALL MEANS OF FINANCE |
3,628,285,000 |
2,369,450,000 |
(2) Changing the effective date to July 1, 3000, to encourage further discussion; and
(3) Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.
As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 300, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 300, H.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Finance,
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____________________________ KYLE T. YAMASHITA, Chair |
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