Hawaii governor proposes $1 billion investment in affordable housing

HONOLULU (AP) – Hawaii Governor Josh Green on Monday proposed a $1 billion investment in affordable housing and tax breaks for people of all income levels to lower the cost of living on the islands.

Green told lawmakers during his first State of the Union address at a joint session of the State Legislature that the tax credits will put money in the pockets of working families so they can pay for food, medicine and housing. He said the tax break would also boost the economy because “every dollar” that goes to working families with limited assets and income will be spent immediately.

Green said each family of four could expect $2,000 in tax credits under his plan, while low-income residents would get more.

“This plan ensures that every income group does a little better and directly lowers the cost of living for every resident, keeping more money in our pockets for every taxpayer, especially those struggling to survive,” Greene said.

The proposal includes a doubling of the standard tax credit and a tax credit for families paying for childcare, nannies, afterschool care and adult day care.

Green estimates that the plan will cut the state’s revenue by $312.7 million a year.

The Democratic governor later told reporters that during his campaign for the state’s highest office, he heard the most about how inaccessible Hawaii was. He said his plan would help stem the exodus of people leaving Hawaii for less expensive places to live.

“If we cut some of the spending on early childhood education or adult day care and put some of the tax revenue back into people’s pockets, then they can stay in Hawaii,” Greene told reporters.

The $1 billion in housing will include funds to increase funding for more affordable housing through the Housing Finance and Development Corporation and provide government rental subsidies to low-income families. Part of the money will go to repair and upgrade public housing.

The governor paused mid-speech to sign a state of emergency order making it easier for the state to build 12 small villages for the homeless, which he calls Kauhale Homes. Each village is expected to have between 100 and 150 people. One of the first will be in Kailua-Kona, at the Kukuyola emergency shelter and assessment center.

Green said he would likely need to take emergency action to streamline the construction of more traditional housing.

“You will see how we get rid of red tape in order to provide housing as soon as possible,” Green said.

Senate President Ron Kuchi, a Democrat, said after the speech that Green’s housing proposals are doable. He said the additional spending this year will ensure more affordable housing in the state.

In terms of tax breaks, he said something on the scale of what Greene proposed needed to “make an impact” given how inflation has affected residents. But ultimately, he said lawmakers’ actions will depend on government tax revenue projections presented by the State Revenue Board.

State law requires the governor and legislators to base their budgets on council revenue projections. The forecasts are expected to be updated in March.

The state started the year with a $1.9 billion surplus as the travel industry rebounded strongly from the coronavirus pandemic.

Rep. Kyle Yamashita, chairman of the House Finance Committee, said lawmakers will have to study the details of Green’s proposals to determine what the state can afford.

“I think being bold is a good idea, as the governor said. But I think the devil is always in the details,” he said. “Because the House of Representatives has priorities. I’m sure the Senate has them. And we’ll see how it all smooths out.”

Both Couci and House Speaker Scott Saiki, a Democrat, have said they prefer the tax credits to go to those who need them rather than people of any income.

Saiki said he agreed that it would be important to streamline the rules governing the construction of affordable housing. He said that this could be done subject to public participation in the process.

House Majority Leader spokesperson Nadine Nakamura said Green’s housing and Kauhale Homes proposals were in line with the House position.

Greene said in his speech that he supports ethics reform proposals from the House Commission on Better Standards of Conduct, which the House of Representatives created after two former lawmakers pleaded guilty to accepting bribes while in office.

Green said he would sign any law based on common sense with meaningful ethics reform.

Rep. Lauren Matsumoto, a Republican and House Minority Leader, said she was “cautiously optimistic” in response to Green’s appeal.

“Many of the topics of today’s message are those that we have been talking about for decades here in Hawaii. Reducing the cost of living, lowering taxes and increasing government transparency,” Matsumoto said.

She said the one-time tax breaks are just the start, but it’s not enough. She said the state needed ongoing measures to help families.