Executive Summary

Hawaiʻi’s budget is a powerful foundation of daily life and a demonstration of our state’s priorities. It sets out where we get our money and what and who we spend it on. It dictates the investments we make in our schools, our environment, our health, and our economy. It is the blueprint for Hawaiʻi’s current and future prosperity and is an economic engine in itself, making up 20 percent of the state’s gross domestic product.

Every budget cycle, our elected leaders need to make tough decisions.

• Will the state raise additional revenue by increasing taxes or fees?

• Will the state add or cut services for people, and if so, what will be affected—public health, public education, economic development?

• Who will bear the brunt of or benefit from the changes—keiki, kupuna, the poor, the wealthy?

• How will we invest in Hawaiʻi’s future? How much money will we spend on affordable housing, the environment, and transportation? How much will we save for a rainy day?

Despite the importance of the budget, for all but a few people its process and substance are incomprehensible. The Hawaiʻi Budget and Policy Center’s Budget Primer seeks to address that hurdle for policy makers, other individuals and groups wanting to understand and have a say in the decisions about our budget. This primer serves as an entry-level course covering the components of the state budget, how it is created, and the priorities and choices it reflects.

In this primer, we focus largely on the state’s executive branch budget. It allocates funding to all state programs and services and is the largest budget that the Legislature passes. The executive budget, as passed by the Legislature in 2018 to be spent in fiscal year 2019, was $17.3 billion for operating and capital expenditures plus other appropriations measures. Reflecting the different branches of government, the Legislature also passes separate budgets for the Judiciary, Legislature, and Office of Hawaiian Affairs.

In addition, this primer provides a high-level summary of county budgets, important in their own right in collecting and spending public money to meet local needs.