Hawaiʻi Appleseed releases 2024 edition of its Budget Primer product
The biennial budget analysis product is a core service provided by Appleseed researchers.
HONOLULU, Hawaiʻi — With the August 10 Hawaiʻi primary election now behind us, Hawaiʻi Appleseed Center for Law & Economic Justice is sending a “Hawaiʻi Budget Primer 2024–25” to all current elected officials in the state, as well as candidates who have advanced to the general election.
A foundational guide to the state budget—the most important policy document adopted by the legislature each biennium (with revisions in the odd years)—the Budget Primer offers decision-makers a convenient and thorough starting point to understanding how the state collects and spends revenue to invest in Hawaiʻi’s people and communities.
“While many of the processes for creating and implementing the budget follow the same method each biennium, there are always unique aspects to each two-year cycle that require lawmakers to adapt and change specifics about where state money can and should be spent, or not,” said Beth Giesting, lead author and director emeritus of the Hawaiʻi Budget & Policy Center, a project of Hawaiʻi Appleseed that has since been folded into the organization’s larger tax and budget work.
Spending in all categories authorized for Fiscal Year 2025 (beginning July 1, 2024) amounts to $23.9 billion.
In 2024, the legislature appropriated an unprecedented $1.1 billion in emergency appropriations (EAs) to be spent by June 30, 2024, bringing total spending to $25.1 billion. Of the total EAs, $362 million was directed to Maui wildfire-related needs, $561 million covered retroactive pandemic hazard pay for state workers, and $179 million paid out accumulated mass transit special funds.
The FY25 Capital Improvement Project budget amounts to $4.5 billion and includes $85 million for counties. Two-thirds of its funding will be borrowed through bonds.
While the legislature also authorized $968 million in additional one-time appropriations for FY25, Governor Green used his veto power to reduce that total to just $58 million, primarily by:
Slashing new appropriations to the Rainy Day Fund from a proposed $300 million to just $1.00, and likewise cutting a prepayment to the state pension fund from $135 million to $1.00;
Eliminating $460 million in one-time appropriations for Maui and wildfire risk management; and
Selectively reducing operating budgets for six different Executive Branch departments by a combined total of $74 million.
Obligated costs—sometimes called “fixed” costs—have grown from $3.1 billion to $4.7 billion over the past 10 years. Only in the last several years have annual general funds increased more than obligated costs, but this is likely to change. That’s because, legislators passed, and the governor signed into law, a major income tax overhaul (House Bill 2404) that will reduce individual income tax collections by more than $1 billion per year.
This will almost certainly result in a big decrease in general fund revenues since income tax receipts make up nearly 40 percent of the general fund. As a result, obligated costs will absorb a greater percentage of general funds, leaving very few resources for emerging needs and other state priorities, such as housing and public preschool.
“Hawaiʻi is facing multiple critical challenges that will require significant state investment to overcome,” said Devin Thomas, Hawaiʻi Appleseed senior policy analyst for taxes and budget. “If we are going to build a vibrant and sustainable community for all the islands’ families, we need truly affordable homes that create stability for working families, a well-resourced public education system that sets our keiki up for success, and economic supports that help people meet their basic needs.”
The primer includes a budget snapshot of each branch of government, including every executive branch department.
