State setting aside $635M in federal stimulus funds for unemployment

Retail businesses on Oahu were allowed to begin reopening on Friday, and many did so — with a...
Retail businesses on Oahu were allowed to begin reopening on Friday, and many did so — with a slew of new restrictions. Others waited, still putting together plans to help minimize the risk of coronavirus.(Jonathan Saupe/Hawaii News Now)
Updated: May. 18, 2020 at 10:22 AM HST
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HONOLULU (AP) — Hawaii lawmakers plan to set aside more than half of the money the state received in federal coronavirus relief money to bolster the state’s unemployment insurance fund.

The House Finance Committee on Friday approved legislation sending $635 million, out of $1.25 billion allocated by the U.S. Congress to Hawaii, to the state’s rainy day fund for this purpose. The bill next goes to the House floor for a vote.

Committee Chairwoman Rep. Sylvia Luke said this money is needed because the surge in joblessness during the coronavirus pandemic has severely depleted the unemployment insurance fund. It held $550 million before the pandemic hit, but the state has already distributed $200 million of this as claims have jumped, she said. At the current rate, the money will be depleted by the end of next month.

The state Department of Labor said more than 220,000 people have filed for unemployment since early March. Hawaii’s jobless rate is estimated to be between 25% and 35%. The department is scheduled to announce the unemployment rate for April next week.

Normally, the fund accumulates money from an assessment placed on employers. But Luke said lawmakers can’t do that now.

Gov. David Ige’s administration has also asked for money to bolster the fund.

House leaders have been working with senators on the measure, and they are in agreement, Luke said at a committee hearing.

The bill also allocates funds for the state’s smaller counties that didn’t receive any funds directly from the coronavirus relief legislation the way Honolulu, as a major city, did.

Hawaii County will get $80 million, Maui County $67 million and Kauai County $29 million, with the amounts set by population.

Honolulu has already started using some of its $387 million on rent relief programs, grants to small businesses and other initiatives to help individuals struggling amid the crisis. Luke expressed hope other counties would do similarly

“We are asking the counties for their kokua in sharing the burden with the state,” she said, using the Hawaiian word for assistance.

Lawmakers rejected an administration request for $10 million for an effort led by Alan Oshima, the Economic and Community Recovery and Resiliency Navigator, to chart a way forward for Hawaii’s economy in the wake of coronavirus. Oshima had proposed spending $5 million for a consultant to help develop these plans.

Sen. Donovan Dela Cruz, the chairman of the Senate Ways and Means Committee, said members of his panel felt the administration had no plan except to pay consultants. Also, Oshima laid out intentions to staff his office for two years even though the federal coronavirus relief money must be spent by the end of December.

Dela Cruz said existing state agencies that could be used for this effort, like the Department of Business, Economic, Development and Tourism, but it’s not clear what role they would play.

Luke said the administration should instead apply for $10 million from the U.S. Economic Development Administration or take funds from money lawmakers appropriated to the state Department of Defense for coronavirus response.

The legislation includes additional funding as follows:

— $40 million for the state Department of Defense and Hawaii Emergency Management Agency.

— $36 million for thermal screening of passengers at Hawaii’s airports.

— $14 million to the Department of Health for “maximum” testing of those with COVID-19 and tracing those who have had contact with positive cases.

— $8.1 million to help the Department of Labor and Industrial Relations deal with unemployment claims.

— $1.3 million to build computer systems needed for the Pandemic Unemployment Assistance program for self-employed workers.

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