HONOLULU — Hawai‘i Gov. Josh Green promised “bold action” in his first State of the State address to a joint session of the state Legislature on Monday.
“Business as usual won’t work anymore,” Green told assembled legislators. “There is simply too much on the line to accept the status quo.”
The governor laid out his plans in the speech, which included allocating $1 billion to housing initiatives, enacting expansive tax reform, and signing ethics measures aimed at reducing public corruption.
He named rising housing costs as “the biggest factor affecting the cost of living in our state,” and put forward a series of proposals aimed at addressing the problem.
Green briefly paused his speech on Monday to sign an emergency proclamation on homelessness intended to make it easier for the state to build Kauhale Homes — small villages for the homeless.
“This emergency proclamation streamlines the construction process for housing, removing unnecessary red tape and enabling our community partners to tackle homelessness and the housing shortage head-on,” said Green. He said that further emergency action would likely be taken to aid in the construction of more affordable housing.
The requested $1 billion in housing funds includes $500 million for the Dwelling Unit Revolving Fund, which provides developers with construction financing for affordable homes, and $400 million for the Rental Housing Revolving Fund, which gives loans to help develop affordable rentals.
Included in the plan is $2 million for Kauaʻi to support the Kealaula development at Pua Loke and add new supportive housing at the Lima Ola project in ʻEleʻele.
Opened in December 2020, Kealaula provides 29 units to families transitioning out of homelessness. The Lima Ola project will break ground this year, adding homes for 26 more families.
The governor’s tax reform proposal, coined the “Green Affordability Plan,” would provide about $312 million in tax relief targeted largely at the working class, through a complex series of credits.
The total cost of the plan is comparable to the $295 million provided in the form of $300 rebates initiated by the Legislature and former Gov. David Ige last year.
Green said a family of four could anticipate about $2,000 in savings from the plan, “the equivalent of a full extra monthly paycheck every year.”
The tax provisions include:
w Indexing tax brackets so they shift with inflation;
w Increasing the standard deduction from $2,200 to $5,000;
w Doubling the personal exemption from $1,144 to $2,288;
w Creating a new Educator Tax Credit for $500 per teacher;
w Expanding the Earned Income Tax Credit.
The expansion of the Earned Income Tax Credit, a working-class credit that was made permanent and refundable by the Legislature last year, has been listed as a priority of the House this year.
State Senate President Ron Kouchi, who represents Kaua‘i and Ni‘ihau, said something on the scale of what Green proposed would be necessary “to have an impact” given how inflation has affected residents.
But he added that what lawmakers do will depend on state tax revenue predictions submitted by the state Council on Revenues.
Among the most significant tasks of the Legislature and Green this year will be dealing with the fallout from a series of public corruption scandals that rocked the state Legislature last session.
A panel of experts, known as the Foley Commission, released a report last year with a series of reform proposals aimed at restoring public faith in government, including 16-year term limits, improved transparency and increased public funding for elections.
Green said he agreed with the Foley Commission’s proposals and said he would sign any “common sense” ethics reform legislation.
“To be a public servant is to be responsible — it is a privilege to carry this responsibility,” said Green. “I have directed our new attorney general to take seriously corruption and ethics reform in state and county government.”
Green took the reins as governor after winning a decisive victory in a primary against Democrats Vicky Cayetano and Kai Kahele, and an even more decisive victory in the general election against Republican Duke Aiona.
“I think it was a pretty bold speech,” said House Majority Leader Nadine Nakamura, who represents portions of the North Shore and East Side of Kaua‘i. “There’s a lot of good things in there and a lot of consistencies with what the House is proposing.”
She noted Green did not emphasize his prior proposal to eliminate the General Excise Tax on food and medicine, which was panned by legislative leadership.
“I think the governor is very practical,” said Nakamura. “He’s been a legislator. He knows that we have to work together to help the residents of Hawai‘i. The olive branches have been handed out on both sides.”
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Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or gscrimgeour@thegardenisland.com. The Associated Press contributed to this report.
