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Hawaii Governor May Nix plans to put more money into the State Rainy Day Fund

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Green says the state can’t afford to put another $300 million into the budget reserve fund, which already contains about $1.5 billion.

Governor Josh Green said Tuesday he is strongly inclined to veto a bill that would pump hundreds of millions of additional dollars into the state’s rainy day reserve fund and the Employees Retirement System.

During an interview with Hawaii News Now’s “Spotlight Now” program, Green said he doesn’t expect to veto many bills this year because he worked closely with lawmakers during the session that ended May 3.

But lawmakers should expect that at least one measure is likely to be defeated.

That’s House Bill 40, which would direct $300 million into the Emergency and Budget Reserve Fund, better known as the “rainy day” fund. That fund now has a balance of about $1.5 billion, the largest amount it has ever held.

The same bill would send another $135 million to the Employees Retirement System next fiscal year to help fund pensions for government workers. That money would supplement the routine annual payments the state makes to fund the pension system.

Governor Josh Green receives a standing ovation before delivering the State of the State address on Monday, January 22, 2024 in Honolulu.  Governor Green highlighted affordable housing, Maui recovery, homelessness, health care, and education, among other topics, which he will present to the Legislature this session.  (Kevin Fujii/Civil Beat/2024)Governor Josh Green receives a standing ovation before delivering the State of the State address on Monday, January 22, 2024 in Honolulu.  Gov. Green highlighted affordable housing, Maui recovery, homelessness, health care and education, among other topics, which he will present to the Legislature this session.  (Kevin Fujii/Civil Beat/2024)
Lawmakers applaud Governor Josh Green before he delivered his State of the State address at the State Capitol on January 22. Green gave lawmakers “high marks” overall for their work this year but said he will likely veto a measure that would have deposited hundreds of millions of dollars into the state’s rainy day fund and employee pension system. (Kevin Fujii/Civil Beat/2024)

“I don’t like that bill,” Green said. “That’s $435 million. I would prefer that we have a more conservative, safer economy and financial plan.”

“I plan to most likely veto that and use that money to balance our budget,” he added.

Green said the budget he proposed before the session would have left the state with a cash surplus of $600 million at the end of the next fiscal year, but during the session the Legislature passed bills that would spend an additional $835 million above what Green wanted.

The governor said he was very pleased with much of the work lawmakers have done, including funding for Maui’s wildfires and passing a massive state revenue tax credit that is expected to boost state tax collections over the next six years will be reduced by $5 billion.

But Green said that if he were to sign every bill that lawmakers passed today, aside from the state budget, “we would essentially be $200 million in the red, which cannot happen.” Hawaii’s Constitution requires a balanced budget.

Green also said it is a “flip” whether he will veto Senate Bill 1511, which would limit the authority of the University of Hawaii Research Corporation. RCUH now provides research funding for UH, along with a variety of other activities.

Green said the bill “could be disruptive, so I have to figure that out.”