Hawaii Gov. David Ige releases first draft of $26B budget for 2016-2017 biennium

MarketsAssociated Press

Gov. David Ige has released the first draft of Hawaii's $25.7 billion budget that covers the next two fiscal years.

Ige released the budget Monday, which is the deadline to submit the document to the Legislature.

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The budget includes $12.6 billion in spending in fiscal year 2016, which is a 4 percent increase over current spending levels, and $13.1 billion in spending in fiscal year 2017, which is an additional 8 percent increase.

The first draft is a baseline budget that was mostly compiled by former Gov. Neil Abercrombie's administration. Ige called the budget a starting point and said in his message to the Legislature that his administration will thoroughly vet and build on the proposals. Ige took office Dec. 1 and is still filling cabinet positions.

Health care and pension benefits for the state's current and former employees were among the highest proposed costs. The state plans to spend $87.4 million on health premiums for the Department of Education, University of Hawaii and other state programs in 2016, and that amount is expected to rise to $216.3 million in 2017. To pay for retirement benefits, the state plans to spend $65.5 million in 2016 and $99.8 million in 2017.

The budget includes capital improvement projects intended to address a backlog of health and safety issues statewide, paid from general obligation bonds. Among the proposals are $100 million in bonds each year to maintain and improve Hawaii's public school facilities. The University of Hawaii is slated for $36 million in 2016 and $27.4 million in 2017 to fix health, safety and code deficiencies statewide. The state's struggling public hospital system is lined up for $12 million each year for capital improvement projects.