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Hawaii Makes Significant Gains to Rebuild Financial Reserves

Press Release

By:
Date:
Location: Honolulu, HI

With the signing of three bills, the State of Hawaii committed to making good on its past and future obligations. Gov. Neil Abercrombie today signed several measures related to fiscal management that appropriate a combined $100 million to increase fiscal reserves and create a new statutory requirement to address long-term unfunded liabilities.

"Today, we are officially no longer a "pay as you go' state," Gov. Abercrombie said. "The Legislature has joined this administration with the goal of moving our state on a path to deal with long-term unfunded liabilities that have gone unaddressed for decades.

Proposed as part of the Governor's legislative package, SB1092 (Making an Appropriation to Recapitalize the Hurricane Reserve Trust Fund) and SB1094 (Making an Appropriation to the Emergency and Budget Reserve Fund) direct a total of $100 million in general funds for fiscal year 2013-2014 toward paying back borrowed money from the state's Hurricane Reserve Trust Fund and "Rainy Day Fund." Each fund is appropriated $50 million.

HB546 (Relating to the Hawaii Employer-Union Health Benefits Trust Fund) requires the state's annual employer contribution to equal the amount determined by an actuary beginning in fiscal year 2018-2019. The bill also holds the state and county governments accountable for said contribution by supplementing deficient payments with the General Excise Tax or Transient Accommodations Tax. It further establishes a phase-in schedule (beginning fiscal year 2014-2015) and a task force to examine the unfunded liability.

"This is a game changer; Hawaii will be the only state in the country where governmental employers have a statutorily required mandated funding course toward 100 percent pre-funding for post employment benefit liabilities," said Finance Director Kalbert Young. "This is a clear message to financial institutions that the State of Hawaii takes very seriously building its financial capabilities to meet all of its financial obligations."


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