In a move to address a projected shortfall in revenue, Gov. Josh Green announced plans to reduce or eliminate spending on 22 projects from the state budget, amounting to over $1 billion. The cuts include $72 million earmarked for a controversial First Responder Technology Campus in Mililani, which has faced opposition from Honolulu police among other concerns.
State Sen. Donovan Dela Cruz, who initially supported the campus plan, now understands the necessity of these cuts after meeting with Green. Dela Cruz acknowledges that Green is obligated to produce a balanced budget under the state Constitution and had no choice but to make these tough decisions.
The reduction in projected revenue by the Council on Revenues was the catalyst for these budget cuts. Initially, the Council forecasted a 2% growth in state revenue, but by May, they revised it to a net loss of 1%. This significant change led Green to take action.
Instead of depositing another $1 billion into the state’s rainy day fund, as proposed by the Legislature, Green plans to cut it in half, leaving the state with $1.5 billion in reserve over the next two years. This decision aims to preserve Hawaii’s strong financial standing and maintain low interest rates on state borrowing.
While these budget cuts impact several projects, Green emphasized that essential services in areas such as healthcare, housing, homelessness, and the environment will remain intact. He also reaffirmed his support for a new Aloha Stadium and the construction of a new Oahu Community Correctional Center.
Projects that did not receive funding can still be reconsidered during the next Legislative session, where they will undergo public debate. Green believes in transparency and being straightforward about the need for spending reductions during times of revenue shortfalls.
Luis Salaveria, the state’s director of budget and finance, confirmed that most of the cuts were focused on projects that were unable to spend their allocated funds. Examples include a reduction in teacher housing construction budget by $120 million, a cut of $88.8 million for water/irrigation infrastructure, and the elimination of $25 million for renovations and improvements to state parks.
The Legislature now has 10 days to decide whether to override any or all of Green’s line-item budget vetoes and reductions. Dela Cruz commended Green’s efficient approach to balancing the budget, which lowers spending amounts.
Despite these cuts, Green still plans to utilize the $200 million discretionary funding granted by the Legislature to support the Hawaii Tourism Authority, public schools, and the University of Hawaii.
In summary, Gov. Josh Green has made difficult decisions to address a projected revenue shortfall by reducing or eliminating spending on certain projects. While these cuts may impact various initiatives, essential services will remain intact, and the state aims to preserve its strong financial standing. The Legislature will now review these budget reductions and have the opportunity to override them if necessary.
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