With the state Legislature poised to meet again in less than a week, Hawaii’s nonprofit social service agencies are urging lawmakers to commit hundreds of millions of dollars in unspent federal funds to health care, housing, mental health services and other support for families that are struggling to survive the pandemic.
Lawmakers last month approved Senate Bill 75, which would deposit nearly $636 million in federal CARES Act money into the rainy day budget reserve fund, and approved Senate Bill 3139 to transfer another $452 million in other assorted state funds into the rainy day reserves.
The federal CARES Act funding was intended to provide relief from the coronavirus pandemic, and lawmakers were criticized for banking the money at a time when many Hawaii residents were jobless and urgently needed help.
On Monday a group of nonprofit organizations called the Working Families Coalition released a plan to distribute $362 million including CARES Act funds “to help families with rent and mortgages, food, health care, child care, domestic violence response, kupuna wellness checks, and more.”
The coalition’s proposal also calls for $11 million to be committed to support immigrants in Hawaii who are ineligible for the federal stimulus checks and unemployment insurance.
“Before the COVID-19 pandemic, the Legislature was focused on a historic joint package for Hawaii’s working families,” said Gavin Thornton, executive director of the Hawaii Appleseed Center for Law and Economic Justice, in a statement. “Today, we’re asking legislators to support those same families, who are now struggling to pay rent and feed their children.”
The group also proposed a package of “alternative revenue options” to help balance the state budget, including proposals to borrow up to $2.1 billion from the federal government for up to three years; eliminate a tax deduction for real estate investment trusts; impose new taxes on sugary drinks; and tax wealthy pensioners.
The state is facing a $2.3 billion budget shortfall for this fiscal year and next year, and Gov. David Ige told leaders of the public-worker unions in April that he planned to impose 20% pay cuts for state employees, including teachers, to help balance the budget.
But union leaders and others contend that cutting public workers’ pay would do more damage to the state economy and might prolong the economic downturn that was triggered by the pandemic.
A separate plan to provide housing support for working families during the pandemic was also floated Monday.
James Koshiba, co-founder of Hui Aloha, told the House Select Committee on COVID-19 Economic and Financial Preparedness on Monday that as federal aid for families and businesses is reduced or expires at the end of July, about 40,000 to 45,000 Hawaii renters will see a sharp decline in their incomes.
Of those households, 21,500 will be at “more serious risk” of losing their housing because as their incomes decline, they will be forced to commit a larger share of their incomes to rent. Within that group, 7,500 will be at the greatest risk and see their housing costs as a share of their incomes jump by 30% or more.
To answer that need, the committee’s Housing and Homelessness Subcommittee is proposing a Housing Relief and Resilience Fund that would be financed with CARES Act funds, Koshiba said. That fund would assist lower-income renters who lost income because of the pandemic, he said.
Tenants who apply for help would agree to pay the same portion of their incomes for rent as they did before the pandemic. They would also agree to receive financial counseling, and would receive “mediation or legal support to take care of any back rent issues,” Koshiba said.
The plan is to negotiate with landlords to convince them to discount their rents over the next six months, perhaps by as much as 15%, he said.
The housing relief fund would then make up the difference between what the tenants would be required to pay and the discounted rent agreed to by the landlords, he said. The subcommittee estimates that would amount to a government subsidy of about $450 per month, or $2,700 total over the six months.
State lawmakers return to the Capitol on Monday.