The new year stretches out ahead, filled with promise.
That’s taking the traditional, optimistic view on prospects for 2025. There is also the more cautionary and realistic perspective: Uncertainty obscures so much of the landscape that the best path ahead can be hard to see.
Always a complication, the state’s financial health is clouded even more than usual. For starters, the changeover to a new, budget-cutting presidential administration leaves states in the dark over their allotments of federal funds.
It’s the unrelenting shock waves of the Aug. 8, 2023, wildfires on Maui, though, that reverberate most strongly. The overall costs of recovery from the disaster have been estimated at more than $12 billion. A report in October cited power lines sparking blazes on overgrown, dry land as the cause.
A $4 billion global settlement was reached to fund payouts to survivors of the blaze that destroyed many businesses and thousands of homes, and killed at least 102 people. The pact is supported by Hawaiian Electric Co. and landowner Kamehameha Schools, which have accepted the bulk of responsibility, because it resolves claims at a sustainable level. State officials favor it because it will finally allow reconstruction and recovery to begin, within a more-stable fiscal landscape.
But the settlement is challenged in court by insurers who claim the right to sue for reimbursement of individual claims they’ve paid. The outcome the state needs is for the Hawaii Supreme Court to clear the way for the global settlement, and for some measure of certainty to return.
The coming year will be pivotal in several other ways:
>> New laws are taking effect this year. Among them is a welcome refinement of good-government improvements, Act 8, requiring more disclosure of relationships between lobbyists and legislators. And starting in July, Act 95 allows out-of-state licensed nurses an easier on-ramp to practice in Hawaii, helping to fill a chronic health-care labor shortage.
But no new law has the direct and lasting effect on taxpayers as the income tax reforms enacted by the past state Legislature. These make broad adjustments to the state tax brackets and change the tax withholding amounts. A series of adjustments, weighted more to the middle and lower income rungs, will extend through the 2031 tax year.
Lawmakers will need reports throughout the coming session to track the likely impact on state coffers to keep fiscal planning within bounds. In particular, the visitor “green” fee deserves another look to ensure that there is enough revenue to finance climate-related improvements to highways and parks.
w The redevelopment of Aloha Stadium tops the list of state construction projects that should benefit the state economy. The concepts for the stadium look solid enough, based on presentations by the developers Aloha Halawa District Partners, but the outlook for the envisioned entertainment district is unclear.
The state must not lose focus on the project’s contribution to the crucially needed housing inventory as a paramount goal.
w Maui settled on a site for permanent disposal of its wildfire debris, but on Oahu, the seemingly endless landfill debate carries on into 2025. The latest proposal is a Wahiawa location, and heavy pushback from the community is all but guaranteed. Clear-eyed assessments of the remaining options are essential to a final selection.
w Finally, residents hope that the appointment of Wendy Hensel, outgoing provost at City University of New York, as the new University of Hawaii president will have a positive impact on the state. Her leadership and vision could reinforce the development of a workforce that can give Hawaii the future it seeks.
