HONOLULU (KHON2) — As the state ponders pushing back the reopening of the tourism industry from August 1, Hawaii’s economic driver remains in limbo.
“The money will run out,” Honolulu City Councilmember Ann Kobayashi said plainly of Federal CARES Act funds.
The State is projecting 117,000 residents out of work through the end of 2020, placing doubt in how long unemployment insurance payouts will be sustainable.
“The Department of Labor has some flexibility in borrowing from the federal government and the legislature with some CARES money can put some programs in place like Work Hawaii, the additional $100 plus dollars for economic development,” State Senate Ways and Means Chair Donovan Dela Cruz said.
On Tuesday, City Council members introduced a resolution to call for better testing. But the City doesn’t have the money to cover the financial loss of a delay from August 1.
“At this point it goes on, we’re not going to have enough money to give to, even with their loans how are people going to pay back, so we’ve been trying to do grants but after that all of the money is going to run out,” Council member Kobayashi said.
The State has already sought assistance from the feds in the form of a $900 million loan. It is also operating at about half of the revenue it usually does, down from $600-$800 million per month in taxes to about $300 million.
“The governor has talked about furloughs. He’s talked about strategic cuts. The legislature can maybe look at raiding special funds,” Senator Dela Cruz said. “We’d probably try to assist the governor with some strategic cuts but that can’t replace job creation.”
Other industries would have to immediately step up.
“There’s some monies for the creation of new jobs with manufacturing of PPE, cleaning supplies, disinfectant, so we need all of those programs up and running much sooner,” Dela Cruz added.
As the state projects billion-dollar deficits year after year to reach $6.4 billion in the red in 2026, economic diversification has to come fast.
“We’re going to have to work with DBEDT in getting agriculture, technology, healthcare, oceanography, aerospace, film, all of those sectors we need at full throttle right now to stabilize the economy,” said Dela Cruz.
Council member Kobayashi added that as far as money goes, Hawaii is dependent on the federal government. The Federal Unemployment Insurance $600 weekly checks are scheduled to expire July 31.