Kalbert Young, 东精影业 vice president for budget and finance and chief financial officer, shares his analysis of the Hawaiʻi State Legislature 2021 session.
The 2021 Legislature adjourned on April 29, after passing more than 260 bills, which the governor will now consider for enactment. Some of these bills will impact the University of Hawaiʻi either directly or indirectly.
This was the first year of the Legislature’s biennium (two-year cycle). Since lingering tax revenue impacts from the ongoing COVID-19 pandemic are still a major factor on the state budget, and federal stimulus aid has recently been enacted to help the state, the budget bill was arguably the most significant measure of the session. The following will highlight components of the budget as it relates to 东精影业 and identify some possible funding impacts to our campuses. In addition to the budget overview, I will also highlight a few other significant measures that passed the Legislature this session.
Operating budget
HB 200 CD1, the biennium budget bill, passed the Legislature and has been transmitted to the governor for his consideration. The table below compares the 东精影业 items funded by the legislature and what was requested by the Board of Regents.
| Campus | Description | ||||
|---|---|---|---|---|---|
| Board | CD1 | ||||
| FY22 | FY23 | FY22 | FY23 | ||
| 东精影业 惭ā苍辞补 | 东精影业 惭ā苍辞补 Athletics | $3,600,000 | $3,600,000 | ||
| 东精影业 Hilo | 东精影业 Hilo Athletics | $400,000 | $400,000 | ||
| 东精影业 Community Colleges | Hawaiʻi Promise Program | $700,000 | $700,000 | ||
| 东精影业 惭ā苍辞补 | Add (3) Positions and Funds for HIMB | $197,228 | $197,228 | ||
| 东精影业 惭ā苍辞补 | Reduce (1) filled position and funds | ($343,800) | ($343,800) | ||
| 东精影业 Hilo | Add Funds for Athletics | $105,895 | |||
| 东精影业 惭ā苍辞补 | Transfer funds to new 东精影业 Cancer Center Program ID | ($3,098,055) | ($3,098,055) | ||
| 东精影业 Cancer Center (new) | Transfer-in from 东精影业 惭ā苍辞补 | $3,098,055 | $3,098,055 | ||
| 东精影业 West Oʻahu | Add (2) Positions and Funds | $164,394 | $164,394 | ||
| 东精影业 Community Colleges | Add (3) Positions and Funds | $160,000 | $220,000 | ||
| 东精影业 惭ā苍辞补 | Reduce Funds | ($35,600,000) | ($30,000,000) | ||
| JABSOM | Reduce Funds | ($1,200,000) | ($1,200,000) | ||
| 东精影业 Hilo | Reduce Funds | ($2,280,000) | ($2,280,000) | ||
| 东精影业 West Oʻahu | Reduce Funds | ($1,080,000) | ($1,080,000) | ||
| 东精影业 Community Colleges | Reduce Funds | ($4,600,000) | ($4,600,000) | ||
| 东精影业 Systemwide Support | Reduce Funds | ($3,391,232) | ($3,391,232) | ||
| Total | $4,700,000 | $4,700,000 | ($47,867,515) | ($42,313,410) | |
American Rescue Plan Act Add-ons
| Campus | Description | ||||
|---|---|---|---|---|---|
| Board | CD1 | ||||
| FY22 | FY23 | FY22 | FY23 | ||
| 东精影业 惭ā苍辞补 | Add Funds for 东精影业ERO | $1,200,000 | |||
| Aquarium | Add Funds for Waikīkī Aquarium | $1,000,000 | |||
| 东精影业 Community Colleges | Add Funds for Hawaiʻi Promise | $1,300,000 | $1,300,000 | ||
It is important to note that the Board of Regents budget request for $4.7 million per year was not for new funding, but to continue funding for currently operating programs at the university—notably support for athletics programs at 东精影业 惭ā苍辞补 and 东精影业 Hilo and funding for the Hawaiʻi Promise Program at the community colleges.
Instead of providing general fund additions, the Legislature reduced 东精影业’s general fund budget by $47.9 million in the first year of the biennium and $42.3 million in the second year. (It should be noted that the Hawaiʻi Promise Program did receive support from federal funds appropriated to the state.) To put this reduction in perspective, these cuts are nearly 10% of 东精影业’s general fund appropriations of approximately $500 million annually. At the start of 2021, all state departments were anticipating that funding was going to be a challenge. Some of that sentiment eased during the legislative session with the emergence of significant federal stimulus aid to the state. However, the end product of the budget passed by the Legislature does not reflect a balanced or thoughtful approach to the overall 东精影业 budget.
As is clearly evident, the budget passed by the Legislature demonstrates an approach that disproportionately reduces funding to the university. 东精影业 惭ā苍辞补, by far, is the most severely impacted in the budget since it will have the largest amount of general funding reduction (-$35.6 million in FY22), as well as the largest percentage reduction than any other campus—approximately -13.8% of their current budget. A relative comparison of all campuses within the 东精影业 system shows that the 东精影业 惭ā苍辞补 general fund appropriation is approximately $210 million, or 42% of the total 东精影业 general fund budget, while their $35 million reduction represents 74% of the total cut to 东精影业.
The Legislature provided federal American Rescue Plan Act (ARPA) funding to three specific areas for a total of $3.5 million in FY22 and $1.3 million in FY23. However, $1.3 million in ARPA funding is to replace reductions of general funds for the Hawaiʻi Promise Program. Not included in the legislatively-appropriated budget are Higher Education Emergency Relief Funds (HEERF) included as part of the three federal coronavirus response packages, and granted as federal assistance to campuses and student aid. Some HEERF monies may have to be reallocated to supplant general fund reductions.
Capital improvement projects
HB 200 CD1 provided a moderate funding level for the 东精影业 System to address capital improvement projects and deferred maintenance, which has been consistently a major historical area of concern for the university. The Legislature appropriated $230.4 million in FY22 and $102.6 million in FY23 in general obligation bonds for the following projects:
| Campus | Project Title | ||||
|---|---|---|---|---|---|
| Board | CD1 | ||||
| FY22 | FY23 | FY22 | FY23 | ||
| 东精影业 System | Renew, Improve and Modernize | $110,500,000 | $110,500,000 | $51,800,000 | $47,640,000 |
| 东精影业 Community Colleges | Capital Renewal and Deferred Maintenance | $25,000,000 | $25,000,000 | $25,000,000 | |
| 东精影业 Community Colleges | Minor CIP | $25,000,000 | $25,000,000 | $15,000,000 | $20,000,000 |
| 东精影业 Hilo | Renew, Improve and Modernize | $24,000,000 | $13,500,000 | $1,300,000 | |
| 东精影业 惭ā苍辞补 | 惭ā苍辞补 Mini Master Plan Phase 2 | $60,000,000 | $35,000,000 | $35,000,000 | |
| 东精影业 Community Colleges | Honolulu CC Technology Renovations | $15,000,000 | $15,000,000 | ||
| Aquaria | Waikīkī Aquarium | $1,500,000 | $9,000,000 | $1,500,000 | |
| 东精影业 Community Colleges | ADA Upgrades | $14,000,000 | $14,000,000 | ||
| 东精影业 West Oʻahu | Renew, Improve and Modernize | $3,000,000 | $3,000,000 | $3,500,000 | |
| 东精影业 Community Colleges | Windward CC Agripharmatech Bioprocessing Facility | $3,000,000 | $3,000,000 | ||
| 东精影业 惭ā苍辞补 | Central Admin Facility with Parking | $4,000,000 | |||
| 东精影业 West Oʻahu | Planning Projects | $500,000 | $500,000 | ||
| 东精影业 Community Colleges | Kapiʻolani CC–Kokiʻo | $2,500,000 | $30,000,000 | ||
| 东精影业 Community Colleges | 东精影业 Maui College Vocational Tech | $2,000,000 | |||
| 东精影业 惭ā苍辞补 | CTAHR–Waialeʻe Research Station | $1,600,000 | |||
| 东精影业 Hilo | Maunakea Telescope Removal (Hōkū Keʻa) | $900,000 | |||
| 东精影业 Community Colleges | Resource and Education Center | $42,500,000 | |||
| 东精影业 System | Makai Research Pier | $5,550,000 | |||
| 东精影业 惭ā苍辞补 | Lyon Arboretum | $1,200,000 | |||
| 东精影业 Community Colleges | Proof of Concept for Maui Health System | $500,000 | |||
| Total | $288,000,000 | $232,500,000 | $203,350,000 | $102,640,000 | |
Additional projects—either not General Obligation Bonds or not in 东精影业
| Campus | Project Title | ||||
|---|---|---|---|---|---|
| Board | CD1 | ||||
| FY22 | FY23 | FY22 | FY23 | ||
| 东精影业 Hilo | Renew, Improve and Modernize (American Rescue Plan Act Funds) | $8,700,000 | |||
| Warehouses for Dept. of Agriculture | $28,000,000 | ||||
Overall, the amount of capital funding support in the budget is decent and appreciation can be extended to the Legislature for its level of support. The funding should help to address some of the capital needs across the 东精影业 System. The amount of work left is still substantial, and the level of funding is still short of addressing immediate reduction of 东精影业’s deferred maintenance backlog.
While we can be appreciative of the level of funding provided, there were also a few projects that were not requested by 东精影业, yet they were put into the university’s budget. For example, $42.5 million has been provided to construct a Resource and Education Center, which was not requested by the Board, and it is unclear what this project entails. Additionally, $28.0 million was appropriated by the Legislature to the Department of Agriculture, but 东精影业 is the “expending agency” for these funds. Again, it is unclear what the purpose of this project is or how it relates to 东精影业. It is unclear as to the extent that these funding choices of the Legislature came at the expense of funding other actually needed 东精影业 priorities.
东精影业 legislative package
As mentioned in my last update, 东精影业 submitted a number of bills for consideration this session. Others arose within the Legislature itself. Several consequential measures did pass the Legislature, although in a rather complicated and convoluted form.
SB589 CD1 went through many variations before the final product was passed by the Legislature. In the end, there are five parts to this bill:
- Part I establishes the 东精影业 Cancer Center in statute and requires the 东精影业 Cancer Center to be administratively affiliated with the John A. Burns School of Medicine (JABSOM). It also treats the 东精影业 Cancer Center and JABSOM differently than every other unit at 东精影业 by restricting their use of Tuition and Fees Special Funds to educational purposes only.
- Part II requires 东精影业 to develop a plan for JABSOM and the 东精影业 Cancer Center to achieve greater operational efficiencies.
- Part III extends the sunset for the technology transfer and commercialization of university intellectual properties.
- Part IV extends the sunset for 东精影业’s innovation and commercialization initiative program.
- Part V extends the sunset date for 东精影业’s president to act as 东精影业’s chief procurement officer in lieu of the State Procurement Office.
While Parts III, IV and V help the university with its missions of growing the state’s economy through innovation and reducing 东精影业’s backlog of deferred maintenance, Parts I and II do nothing to assist the university and the restrictions on the use of 东精影业’s funds may also be problematic. Although these initiatives were in separate bills at the beginning of the legislative session, they are now in one “omnibus” measure.
Another section of SB589 CD1 adds provisions imposing new and quite burdensome requirements on the university’s innovation efforts to partner with employees to commercialize intellectual property and research activities, as is commonly done at peer R1 institutions throughout the country. These provisions were not heard in either chamber of the Legislature and only appeared at the last minute during the conference phase of the Legislative Session when no public testimony is taken. These provisions also do not account for existing contracts already entered into. As the university tries to create additional sources of revenue to reduce its need for general funds, this type of disruption seems at best, counterproductive.
There are similar components in other bills that will have some impact on our university. While many are innocuous, some are impactful, and a few will have significant ramifications if they take effect as written. The 东精影业 administration is now reviewing all bills from multiple perspectives and assessing the go-forward options and impacts on the university. The governor has until July 6, 2021, to either sign, veto or allow bills to become law without his signature.