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Hawaii Wildfire Recovery Cost Estimates Still Unknown

Hawaii state agencies now face potential spending restrictions of up to 15 percent as the Legislature considers an emergency appropriation as an alternative to plug the still uncertain deficit.

Aerial view of a city in Hawaii.
(TNS) - State finances are bleeding heavily from Maui wildfire recovery expenses, but there is still no firm idea on how bad the hemorrhage will be through June 30 or how to compensate for it.

Every state agency in Hawaii faces potential spending restrictions of 10 percent or 15 percent while the Legislature considers an emergency appropriation as an alternative to plug the big yet still uncertain deficit for the current fiscal year, ending June 30.

On Thursday, Gov. Josh Green sent a memo to Senate President Ron Kouchi and House Speaker Scott Saiki seeking "expeditious consideration" of the emergency funding measure, Senate Bill 582.

Yet Green didn't specify how much money should be appropriated, which concerned some senators, who needed to advance the bill by Thursday to keep it viable.

"We are bleeding right now and it needs to stop, " Sen. Jarrett Keohokalole (D, Kaneohe - Kailua) said Thursday during a briefing by state administrators who are leading and accounting for wildfire recovery work. "I understand it's hard, but there's no level set at this point from the administration about what the cost is to the rest of the operations of state government."

Sen. Donovan Dela Cruz, chair of the Senate Ways and Means Committee considering SB 582 Thursday, called the written message from Green the most unusual one he has ever seen because of its lack of information.

"If you read Governor's Message 3, which I encourage you all to read, it should only take you a second because there's hardly anything in it, " Dela Cruz (D, Mililani-Wahiawa-Whitmore Village ) said during the meeting.

Luis Salaveria, director of the state Department of Budget and Finance, told the committee that the state's tentative obligation for wildfire recovery costs to date is $611 million, up from $561 million he reported to the committee Feb. 20.

In December, about four months after the Aug. 8 fire that destroyed most of Lahaina, Green swept together $199 million to cover disaster expenses for the current fiscal year from $164 million redirected from unused appropriations for other things, $30 million from a discretionary fund and $5 million already in the state's major disaster fund.

So, the current shortfall is $412 million.

However, Salaveria noted that this deficit could go down as the state negotiates with FEMA over which fire survivors displaced from their homes are eligible for FEMA assistance.

Some ineligible households are undocumented immigrants and migrants under the Compacts of Free Association with three Pacific island nations. Others owned condominiums lost in the fire, though Salaveria said FEMA recently tentatively agreed to make those condo owners eligible. This change alone, Salaveria said during Thursday's briefing, could transfer $40 million to $50 million in costs from the state to FEMA.
Much of the fire recovery expenses totaling $2.1 billion to date and largely covered by FEMA has been caring for fire survivors under a $500 million contract with the Red Cross to pay for hotel lodging, food and services at $1, 000 a day per household.

Out of about 5, 400 households displaced by the wildfire, about 1,000 were ineligible for FEMA support and were staying in hotels earlier this year at a cost of $1 million a day to the state.

This surprise expense emerged only earlier in February, Salaveria told the committee.

At the Feb. 20 briefing, the number of FEMA -ineligible survivors in hotels had dropped to 820, and on Thursday the number was down to 659, according to James Barros, administrator of the Hawaii Emergency Management Agency.

Some of the decrease is due to FEMA decision changes, though the state has been trying to find less expensive housing for survivors who are not eligible for FEMA assistance.

On the other hand, Green wants to add $65 million to wildfire recovery costs in the current fiscal year for his proposed One Ohana Fund to compensate families of people who were killed in the fire as well as people who were seriously injured if they forgo litigation.

Dela Cruz questioned why the governor didn't have a bill introduced in January for a One Ohana Fund appropriation after announcing plans for the fund in November. Dela Cruz also noted that some colleagues are uncomfortable with the fund, which can be seen as having taxpayers compensate victims when it is questionable whether the state is liable for the fire.

Administrators of the fund are starting to accept applications today.

The Ways and Means Committee unanimously voted Thursday to pass SB 582. If the full 25-member Senate passes the bill next week, it will cross to the House for consideration.


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