Gov. Josh Green plans to ask the upcoming Legislature for the power to divert $60 million in each of the next two fiscal years from interest earned on the state’s “rainy day fund” to help Hawaii fight back against climate change and reduce the risk of future wildfires.
The interest on the state’s projected $1.5 billion rainy day fund falls well short of the estimated $200 million Hawaii will need annually to respond to climate change and to “lower insurance costs, fortify the shoreline and protect oceanfront communities,” Green said.
So he expects lawmakers to finally decide how to best assess a proposed tourism impact fee, or “green fee,” to also help Hawaii address climate change.
The idea remains popular at the state Capitol and among voters but has received pushback from segments of Hawaii’s tourism industry, especially over proposals to raise the hotel room tax and dedicate the increase to climate change.
Green plans to introduce a laundry list of bills on other green fee funding ideas aimed at tourists so legislators can start hearings on them quickly after the session starts Jan. 15.
“We expect the Legislature to give me at least one of those options … so that I can use it to protect us against climate change,” he said. “I respect the boundaries between the legislative branch and the executive branch, but we need to do this.”
The new fees also will be needed as “insurers are getting more reluctant to insure higher-risk areas,” Green said. “I need these resources to provide some protection to our entire state. That’s why we can’t play small ball and we need a solution.”
Residents and businesses this month should begin feeling the effects of historic tax breaks passed last session, according to the governor. They’re just one of Green’s priorities to make it less expensive to live in Hawaii.
“My focus is absolutely and totally committed to making Hawaii affordable for our local people. So we’re continuing to build housing and to lower taxes for working families and to actually make it possible for us to live here, to keep our kids here,” he said. “This is a long-term plan.”
Senate President Ron Kouchi did not respond to a request for comment on the Senate’s priorities for the upcoming session. But new House Speaker Nadine Nakamura remains in lockstep with Green that affordable housing and reducing the cost of living are also priorities for House Democrats.
“The high cost of living here is top of mind for everyone,” the Kauai lawmaker said. “Whether it’s affordable housing or the issues of homelessness, people are concerned about the high cost of food and the need for a stronger, more diversified economy.”
House Democrats are still formalizing their legislative agenda before the session starts. And Green will outline details of his legislative goals during his State of the State Address on Jan. 21.
According to Nakamura, some representatives are talking about increasing the maximum income to qualify for “affordable housing” in order to help working families. Most affordable housing programs apply only to people who earn 60% or less of what’s known as area median income. Instead, some House members are talking about raising the income maximum to 140% of area median income, she said.
“That’s why people are moving away,” Nakamura explained. “Low-income housing tax credits are focused at 60% AMI or below. So focus on workforce housing is going to be top of mind.”
Like Green, the House speaker is worried the Maui wildfires will further exacerbate Hawaii’s insurance crisis, as insurers leave the market or refuse to sell certain policies, which already is happening in the Puna District of Hawaii island where new lava and hurricane insurance cannot be bought.
“All of our members are getting calls and messages from constituents or insurance carriers who are leaving Hawaii,” Nakamura said. “And some of them are quadrupling the cost of insurance.”
Along with Green, Nakamura also wants to figure out how to fund plans to prevent future disasters, including “making sure we’re working with our utilities for hazard mitigation plans in place.”
Green said he has been impressed with Nakamura’s leadership since House Democrats elevated her to the post after the Nov. 5 general election. She previously served as House majority leader under former Speaker Scott Saiki.
“I really do like her,” Green said. “Already I have a lot of respect for Speaker Nakamura. … She’s a thoughtful leader already. We will work hand in hand on housing with the House and Senate.”
The administration’s draft budget proposal also calls for continued funding on other initiatives Green started in his first session as governor two years ago and last year in response to the 2023 Maui wildfires.
It includes a carryover balance of $1.07 billion heading into 2025, $740 million for fiscal year 2026, and $640 million for fiscal year 2027, which could change depending on upcoming Council on Revenue projections.
The budget includes the state’s $872.5 million share of a proposed $4.04 billion Maui wildfire settlement that would resolve more than 650 lawsuits filed in state and federal courts.
Including payments to families who lost loved ones, the state already has paid out $72.5 million, according to the governor.
Green called it “a very rare occurrence” to see a settlement supported by all parties except the attorneys representing insurance companies. He said insurers have asked the Hawaii Supreme Court to rule on their motion to reserve the right to sue other parties, and a verdict is expected in mid-January.
The settlement also will relieve Hawaii courts from having to hear hundreds of lawsuits over the next five years, he added, while helping Maui survivors rebuild faster and keep their settlement money in the local economy.
“I just can’t have outsiders from the mainland blocking us,” Green said. “If the court rules against, that could send us back to square one. I would never want that for our people.”
The governor’s draft budget calls for $276 million to house people representing different economic demographics, including $56 million for the Mayor Wright Homes public housing project in Kalihi-Palama; $50 million for University of Hawaii housing; and $30 million for the new ALOHA Homes — Affordable Locally Owned Homes for All — program based on a Singapore model that would have the state build and sell leasehold homes to local residents.
“If we have enough housing, it becomes much more affordable to live in Hawaii,” Green said. “We’re short on nurses. It’s because they can’t find housing. We’re short on police. It’s because salaries can’t keep up with the housing needs and so on. So housing is our top priority as we also lower the cost of living by lowering taxes.”
Upcoming collective bargaining negotiations that are likely to increase salaries for unionized public workers are also accounted for in the administration’s budget.
