HONOLULU — Gov. David Ige said Tuesday that coronavirus relief aid from the U.S. government and better-than-expected tax revenues have prompted him to reduce the size of budget cuts he has proposed for public schools.
Instead of a 10% cut to the state Department of Education budget for the fiscal year beginning July 1, Ige instead said he would propose a 2.5% reduction.
“That represents an increase to the department of $123 million dollars that we’ve asked them to put back into the classroom,” Ige said.
Hawaii tax revenues have declined sharply as the flow of tourists to the islands plummeted during the pandemic.
The coronavirus relief package Congress passed in December helped the state with its inclusion of about $200 million for Hawaii schools.
Tourism revenue also increased modestly after the state allowed travelers to skip quarantine if they test negative for COVID-19 before they get on a plane for Hawaii. This caused the Council on Revenues, which predicts tax income on behalf of the state, to revise its revenue forecasts higher in January.
Still, Ige said general fund tax revenues for the first seven months of the current fiscal year were down 9.4% compared with the same period last year. In addition, tax revenue was not expected to rebound to pre-pandemic levels until 2024.
The governor said the administration is negotiating with employee unions to find ways to achieve “labor savings.”
“We can’t afford the current payroll that we have based on the revenues that are projected,” Ige said.
The governor said Hawaii would need more federal aid to continue to avoid instituting furloughs for workers beyond July. He expressed hope that a new relief package proposed by the Biden administration would include direct aid to state governments, funding for public schools to facilitate in-person learning and money to cover unemployment insurance costs.
The governor maintained his budget cut proposals for departments other than the Department of Education.