Leaders reach deal on state budget
State government funding is slated to be a little higher in the next two fiscal years compared with the current year under a budget agreement reached Monday evening by state House and Senate leaders.
A compromise draft of the state's biennium budget bill authorizes $19.9 billion in spending on state government operations and capital improvement projects for the 2026 fiscal year that starts July 1, up almost 4 % from $19.2 billion in the current fiscal year. For the 2027 fiscal year, $19.8 billion in spending is proposed.
Sources for budget expenditures include bond debt and federal funding. Appropriations from the state's general fund supported by state tax collections amount to about $10.6 billion in each of the next two fiscal years, up nearly 2 % from the current fiscal year.
Rep. Kyle Yamashita, lead negotiator for a 15-member House team, called the conference draft of House Bill 300 'a responsible and forward-thinking budget ' that strengthens the state's safety net and core programs.
'This budget addresses the critical needs of our communities, including housing, agriculture, natural resources, transportation, public safety, and economic development, ' Yamashita (D, Pukalani-Makawao-Ulupalakua ) said in a statement. 'It sets a strong foundation as we move into the interim and continue to assess federal impacts on our state.'
Sen. Donovan Dela Cruz, who led negotiations for a 13-member Senate team, said it took a lot of people to put together the conference draft, and with Yamashita thanked everyone involved, including a team from the administration of Gov. Josh Green.
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'From expanding core programs for vulnerable populations to supporting regional economic development that builds long-term resilience, we've worked hard to make sure our decisions today strengthen Hawaii's foundation for tomorrow, ' Dela Cruz (D, Mililani-Wahiawa-Whitmore Village ) said in a statement. 'Whether it's food security, access to healthcare, or helping small businesses grow, this budget is about making sure every part of our state has the opportunity to thrive.'
After Green submitted his spending requests in HB 300, the House passed its draft March 12, and the Senate further amended the bill April 8. Since then, negotiators have met in private to hash out differences, including on Easter Sunday. There also were three public conference committee meetings to announce compromises on spending items where previous differences existed.
The conference draft of HB 300 is subject to final votes by the 51-member House and 25-member Senate that have yet to be scheduled. Approval of the bill is expected. This year's legislative session is scheduled to conclude May 2.
Green has the power to reject individual appropriations using line-item vetoes, and also can opt not to release budgeted funding for use.
There is high uncertainty over whether there will be big cuts to federal funds for state government programs and projects in the weeks and months ahead under the administration of President Donald Trump. Some Hawaii lawmakers have contemplated the need to convene a special session to address any budgetary problems created by federal funding cuts as well as potential major negative impacts on Hawaii's economy from Trump-mandated tariffs.
The bulk of the state budget is for agency and program operations, including personnel and maintenance costs.
The negotiating committees released a list of almost 200 operational spending item highlights for the biennium.
Some of them are :—$3.2 million for a temporary elementary school replacing one lost in the August 2023 Lahaina wildfire.—$5.2 million for fireworks law enforcement.—$10 million to improve 911 services.—$30 million for a health care education loan repayment program.—$42 million for summer programs.—$95 million for special highway maintenance.—$150 million for deferred public school maintenance.—$248 million for Hawaii Health Systems Corp.—$450 million for a hospital sustainability special fund.
Separate from the state's operating budget, HB 300 includes capital improvement project funding of $3.4 billion in the 2026 fiscal year and $2.3 billion in the 2027 fiscal year. Of these sums, $1.4 billion and $423 million, respectively, is to be financed using bond debt. For the current fiscal year, the Legislature appropriated $4.5 billion for capital improvement projects.
Capital improvement appropriations highlighted by the committees for the next two fiscal years include :—$1.8 billion for airport projects.—$1.5 billion for highway projects.—$380 million for affordable-housing development.—$118 million to improve University of Hawaii at Manoa student housing.—$72 million for regional public school meal kitchens.—$36 million for Hawai 'i Convention Center repairs and upgrades.—$30 million toward replacing Oahu Community Correctional Center.—$10 million for emergency siren system improvements.
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