Recovery costs for Maui fire are putting Hawaii’s budget at risk

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Hawaii lawmakers grilled the budget director Thursday as recovery costs for the Maui wildfire are coming in double expectations, putting the budget at risk.

During a hearing before the Senate Ways and Means Committee, Budget Director Luis Salaveria was asked when Gov. Josh Green’s administration realized costs to temporarily house people displaced by the fire were much larger than projected.

“When did you folks know this was out of control?” asked state Sen. Jarrett Keohokalole. “There seems to be a lack of urgency. The Senate should not be the body that figures this out halfway through the session. There are communities across the state that are going to be significantly impacted by this and we should have known sooner. When did the administration realize the burn rate was running at this unacceptably high level?”

Hawaii state senators asked the budget director when Gov. Josh Green’s administration knew recovery costs were spiraling out of control.

Hawaii Governor’s Office

Salaveria responded that the administration realized in February the Federal Emergency Management Agency would not reimburse some of the housing costs because it deemed some of the people ineligible. The federal government won’t pay to house people who were already homeless or who are undocumented.

The Green administration had originally earmarked $199 million in the major disaster fund to cover wildfire recovery expenses for the fiscal year that ends June 30, but Salaveria told the committee the administration is now estimating it needs an emergency appropriation of $412 million to cover wildfire-related costs this fiscal year.

Hawaii Emergency Management Agency Administrator James Barros told senators the state has to cover costs for 659 families deemed ineligible, but they are still negotiating with FEMA, so that number could go down.

“We are bleeding right now, and it needs to stop,” Keohokalole said. “There is no level set by the administration as to what the costs will be to the rest of the operations of state government, if we don’t get this under control right now.”

The total includes $65 million for the state’s share of Green’s One Ohana Fund, which will be used to settle claims by survivors who were seriously injured or lost family members in the Aug. 8 fire.

As things stand, there will still be an estimated reserve balance of $600 million by the end of the fiscal year in June, but if there is no cost containment it could affect the ending balance for June 2025, Salaveria said.

“That is where we get to a precarious position,” he said.

State Sen. Donovan Dela Cruz, the committee’s chair, told Salaveria he could not continue just letting the departments tell him how much they were spending, rather than having them adhere to a budget.

“The more we put into shelter, the less we are putting into real housing and infrastructure,” Dela Cruz said. “We need to have a housing plan. The financial plan should let us know how much you are budgeting.”

The committee approved a motion made by Dela Cruz to amend Senate Bill 582 to include transferring excess cash from non-general fund to general fund. But he added, “we would wait to hear much more specifics from the administration.”

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