Executive Summary

The 2025 legislative session convened under twin existential threats: Hawaiʻi’s worsening affordability crisis, and an impending fiscal tsunami of federal budget cuts. With Congress poised to slash Medicaid, SNAP, and Section 8 housing vouchers—programs hundreds of thousands of residents depend on—lawmakers faced a stark policy choice: raise state revenue through new taxes, or reactively cut services to avoid them.

Hawaiʻi’s experience during the Great Recession reveals the devastating community and economic costs of austerity policy. Decades of research further disproves the notion that low taxes on the wealthy create shared prosperity; so-called “trickle-down” economic policies drain community wealth to boost shareholder profits, leaving the public with fewer resources and fewer opportunities.

Federal policy now doubles down on this failed framework. It is therefore critical that Hawaiʻi moves in the opposite direction—offsetting federal tax cuts for the rich with state taxes on wealth. This would not only combat rising inequality, a key driver of societal challenges, but also help fill funding gaps caused by federal cuts, preserving essential services and avoiding the deep harm of austerity.

What emerged by session’s end was a series of courageous but incomplete victories, alongside missed opportunities. The 2025 session laid bare both the power of organized communities and the paralyzing grip of systemic inequity.

Contradictions in Outcomes

• Food Equity: Thanks to the tireless work of coalition partners and overwhelming public support, a landmark school meal expansion law, Act 139, will end lunch-line stigma and feed 11,000 additional keiki this year. By 2027, when fully phased in, tens of thousands more children will receive free meals. This is a decisive victory for students, parents, and our community—but our work is not done. The state must continue expanding access until every student is included.

• Transportation Equity: Together, Act 212 and Act 112 are projected to boost Safe Routes to School funding to $5–6 million annually. This will protect keiki and the broader community by funding critical infrastructure improvements in high-fatality corridors near schools. Yet, legislators continue to criminalize pedestrians,  rejecting jaywalking reform—a failure of policy underscored by tens of thousands of punitive tickets that have done nothing to improve street safety.

• Affordable Housing: Act 159 will accelerate approvals for affordable housing in Transit-Oriented Development zones and create a new special fund to support mixed-income projects. However, the funding source for this new account remains unclear. Separately, Act 278 provides a partial lifeline by requiring mediation before eviction, yet lawmakers again failed to fund critical rent relief—a cornerstone of successful mediation. Finally, by rejecting a locals-only housing market and conveyance tax reform without debate, the legislature failed to secure a competitive edge for local residents.

• Tax & Budget Policy: Tourists will now contribute more to preserving Hawaiʻi’s natural environment and infrastructure through the “Green Fee,” a Transient Accommodation Tax hike established by Act 096. Yet, lawmakers continue to shield the ultra-wealthy, rejecting tens of millions in annual revenue by preserving a loophole that taxes capital gains at a lower rate than workers’ salaries. In rejecting a state Child Tax Credit, they denied struggling families proven relief and abandoned a powerful tool to fight poverty and stimulate our economy.