The recovery from the Aug. 8 Maui wildfire will cost state government about $500 million in the year ahead, including $60 million to settle claims by survivors who lost family members in the blaze, according to Gov. Josh Green.
Green offered that estimate at a media briefing Monday where he presented his proposed $19.2 billion budget for the fiscal year that begins next July 1. This is the first budget developed entirely by his administration since Green took office late last year.
Green also provided details on about $40 million in additional state funding he wants to earmark for efforts to prevent or fight additional wildfires.
The governor stressed he is still determined to press ahead with his plans for tax breaks for working families as well as efforts to cope with homelessness and Hawaii’s shortage of affordable housing.
“We obviously have been heartsick over the loss on Maui, and so we are going to live up to that commitment completely, but we know that there are so many priorities that people all across the state really need us to stare down,” Green said.
“And so we’re going to continue on with our housing priorities, our homeless priorities; you’re going to see a lot of strong moves on health care,” he said. Those areas and mental health services “will be mostly where our appropriations are going.”
Green also renewed his pitch for a “green fee” that would be levied on tourists to help Hawaii cope with the impacts of climate change, including the wildfire threat.
Green is also proposing a substantial bump in state spending on adult mental health.
He said the state needs to raise some $50 million per year for that effort through either a new fee or an increase in the state taxes imposed on hotels and vacation rentals.
Green made a similar pitch last year for a “green fee” to deal with climate change, but the plan died at the Legislature.
House Speaker Scott Saiki again expressed doubts about such a fee Monday.
“We’ll hear him out,” Saiki said, but he pointed out the Legislature just authorized the counties to increase Hawaii’s hotel room tax in 2021. “At some point, the (transient accommodations tax) may be too high.”
“I agree there needs to be committed funding for wildfire prevention and climate change and other environmental mitigation,” Saiki said. But he said Green’s plan might not be the right approach.
“How do you enforce the green fee?” Saiki asked. “It’s not fair to just impose it on hotel visitors” in an era when many tourists people stay at vacation rentals in Hawaii neighborhoods. And Saiki said he is unsure if all of the counties would be able to collect a new fee from the stand-alone vacation rentals.
Mufi Hannemann, president and CEO of the Hawaii Lodging and Tourism Association, said he is willing to consider the idea of a green fee, but opposes the idea of a hotel tax increase.
“Obviously in a perfect world, we wouldn’t want to go down either path. We’ve got some daunting challenges that remain from the pandemic and Maui and so forth,” he said.
Of the two possibilities, Hannemann said a green fee charged to tourists who visit specific attractions would be more acceptable. “So long as it has a direct nexus to a tourism-related purpose, and it’s fair and it’s equitable, that would be much more palatable than raising the TAT,” he said.
Green also said he will also propose a $38 million package of tax credits to provide some tax relief to working families who have children in child care, or are providing care for adults.
And he said he will once again propose adjustments to the state income tax brackets to provide some additional tax relief. That is another proposal that failed in the Legislature last year after lawmakers said Green’s proposal was too complex.
At least 100 people died in the Aug. 8 Lahaina wildfire, and Green’s proposed budget would commit $60 million in state money to a fund that will pay up to $1.5 million in compensation to their surviving family members if the families choose not to pursue wrongful death claims in court.
Green said Monday that Hawaiian Electric is contributing $75 million to that fund; Kamehameha Schools is contributing $15 million; Maui County is providing $10 million; and Hawaiian Telcom is adding $2.5 million for a total of $162.5 million. That effort is being called the “One Ohana” initiative.
The governor said a similar but separate pool of funding will be created for people who lost their homes in the fire or suffered other property damage. He said he expects other donors will contribute money and other resources to that effort.
Green is also proposing to commit $20 million to the state Department of Hawaiian Home Lands for wildfire recovery and preventive measures, and to provide the Department of Land and Natural Resources with $17.4 million for wildfire prevention and response.
His proposed budget would also add 20 positions to the Hawaii Emergency Management Agency for disaster preparation, response and recovery, and provide $653,000 for “brushfire positions” for HIEMA.
Another $13.3 million in state general funds and $12.7 million in federal funds would be earmarked for disaster case management services for people who have been displaced by the Maui wildfires.
Green is also proposing a substantial bump in state spending on adult mental health. General fund spending on the Hawaii State Hospital and other adult mental health services would increase from $165.7 million this year to nearly $213 million next year, with most of the new money going to the hospital.
Nurse Justin Bautista was fatally stabbed on Nov. 13 while working at a halfway house on the hospital grounds, and state data shows staff at the hospital have been the victims of hundreds of assaults by patients at the facility during the past decade.
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