Gov. Ige: Hawaiʻi allocates entire $1.6B American Rescue Plan Act funds

In May of 2021, the state received $1.6 billion from the federal government as part of the American Rescue Plan Act. The funds were to be used to respond to the state’s emergency needs stemming from the COVID-19 pandemic.

“As you know, COVID resulted in a global economic shutdown which had immediate negative impact on our state. We had to cut many programs and services, and our state workers were at risk of being furloughed. Our hospital and health care systems were pushed to the limits. Our tourism industry was shut down, and our economy was on the brink of collapse.”

“At the same time, there was increased demand for essential government services, and the social safety net was more important than ever,” said Gov. Ige, who called the ARPA funds “pivotal” in helping the state continue essential services, and supporting the most vulnerable populations.

He acknowledged the legislature for their work in partnering with the state to appropriate the funds during the 2021 session. Gov. Ige said his approach with the funds was “to provide critical services, respond to the COVID-19 health emergency, and to promote economic recovery and equitable outcomes for those who were hard hit by the pandemic.”

In addition to what was appropriated by the legislature, there were some programs and services that required urgent attention, that the state was able to support with ARPA funds. “We have been working diligently with the legislature and the departments and as a result, we were able to allocate the entire $1.6 billion that was provided,” said Gov. Ige.

“We know we need to leverage as much federal funding as possible that we can get as a state and make sure that we spend it in the areas of high need,” said Gov. Ige.

Unemployment:

“Hawaiʻi went from amongst the lowest in unemployed to the highest in unemployment in a matter of six weeks. We wanted to make sure that employers didn’t suffer a double whammy during this pandemic–where they would see their unemployment insurance rates skyrocket at the time when they could least afford it,” said Gov. Ige.

• $800M – The state used these funds to pay an Unemployment Insurance loan that was needed to continue to payout UI benefits to individuals who were out of work.
• $70M – These funds were used to set up a UI call and adjudication center to help complex cases in order to determine benefit eligibility.
• Proposing continued support in FY23 with ARPA funds.

“We do know that employers are at a fragile point in our economy, that any significant increase in their costs to put people back to work would be very, very difficult,” said Gov. Ige. “These investments not only allow us to continue to operate with the UI program and bring in additional staff, but also help small businesses and other employers at a time when they were all struggling.”

ARPA support for businesses:

Gov. Ige said the ARPA support eliminated a tax credit reduction for employers.

• This saved employers $21 per year/employee.
• Set UI tax schedule, resulting in average employer tax savings of $948 per year/employee in 2021 and $1,084 in 2022.

“With these investments, we were able to pay out… benefits to eligible individuals in Hawaiʻi, which helped more than 300,000 people during the pandemic,” said Gov. Ige. “We also provided $5 million for the Green Youth Corps Jobs program which will provide funding for up to 1,000 participants to pursue career and learning opportunities in conservation.”

Hospitals, public health response:

• $32M – HI Health Systems Corportation
• $84M – EMS and injury prevention
• $16M – HI Health Systems Oʻahu Region
• $2.9M – Wahiawa Hospital Services
• $11M – Maui Health System hospital subsidy
• $10M – COVID-19 test kits
• $8M – Department of Health, COVID administrative support
• $50M – Department of Public Safety, strengthen COVID response

Visitor Industry:

ARPA funds were used to keep the Hawaiʻi Tourism Authority intact while the pandemic heavily impacted the visitor industry. HTA used these funds to restructure operations and focus more on promoting more sustainable tourism to Hawaiʻi. Funds were also dedicated to creating the Safe Travels program to help mitigate the spread of COVID-19.

• $60M – HTA
• $11M – Convention Center
• $41M – Safe Travels Hawaiʻi

Essential Services:

ARPA funds were critical in supporting important services for the community.

• $10.8M – Homeless services
• $1.5M – Senior centers
• $1.3M – Family health services

Education:

It was important to support our university system during the pandemic, as well as those with financial need.

• $28M – University of Hawaiʻi System
• $1.3M – Financial need scholarships (HI Promise Program)

Infrastructure/Looking Forward:

ARPA funds also supported Broadband initiatives, which are included in Gov. Ige’s supplemental budget request.

• $1.5M – Broadband infrastructure planning
• $2.7M – Modernize financial system

“The pandemic showed us that there is a huge digital divide in our state, and that access to reliable and high-speed internet is essential for all students and workers. We anticipate additional federal funding this year through the Infrastructure Investment and Jobs Act signed earlier this year, and potentially other federal sources. We will continue to use these funds to restore and rebuild our state this coming year,” said Gov. Ige in a press release highlighting the spending.

Gov. Ige noted that the actual time period to expend the funds extends through 2026. “So the funds are appropriated, and agencies and nonprofit partners will be working to expend the funds as we proceed forward.”

One of the challenges with the American Rescue Funds was the specific and strict federal guidance. “If funds are misused or used in a way that is not allowed under the federal guidance, not only would we be subject to repayment of the funds, but then we would have to make it up in other areas. I think one of the biggest challenges is there is strict guidelines that need to be followed, and we do need to make sure that all of the programs operate within the guidance,” said Gov. Ige.

While a “large majority of the funds are appropriated and allocated,” not all are expended yet, and some are part of the governorʻs supplemental budget. “Some of the funds are included in my supplemental budget request to the legislature. For example, continued funding for the Safe Travels program,” said Gov. Ige, noting that the state is also requesting an increase in cost for operations in the jails and prison system as a request in the supplemental budget.

*Maui Nowʻs Wendy Osher contributed to this report.