Hawaii to Spend $2.9B on Capital Projects, Stimulate Jobs

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Nearly a third of the state’s $2.9 billion in spending on construction projects over the next two years will go to harbors and highways.

Lawmakers this week agreed to spend $1.85 billion on capital improvements in fiscal 2012, which begins July 1, and another $1.01 billion the following year.

The spending represents a huge increase from the initial budget prepared by former Gov. Linda Lingle, who called for $484 million in ’12 and $486 million in ’13.

Gov. Neil Abercrombie made “New Day Works Projects” a centerpiece of his State of the State speech, calling spending on capital projects a central part of his economic strategy that would “directly attack unemployment and jumpstart business activity.”

The money would cover 430 projects outlined in the CIP portion of the state budget bill. passed the full House and Senate Tuesday, and now heads to Abercrombie for final approval.

CIP Projects = Jobs

Sen. Michelle Kidani, vice chair of the Ways and Means Committee, told lawmakers that investing in local infrastructure will stimulate job creation. She took the lead on the CIP budget for Ways and Means, while Rep. Kyle Yamashita led efforts for House Finance.

“Expediency in creation and maintenance of both construction jobs as well as other jobs associated with capital projects will generate more disposable income that should build returns certainly throughout our economy,” Kidani said on the Senate floor.

Shovel-Ready, Safety Take Priority

Kidani said projects that made the list were either shovel-ready or deemed necessary for health and safety reasons. She highlighted the following priorities:

  • $816 million for state harbors and highways through the Department of Transportation
  • $328 million for public schools and libraries
  • $174 million for the 10-campus University of Hawaii system
  • $149 million for the Department of Health and the public hospital system (Hawaii Health Systems Corp.)
  • $8 million to repair infrastructure damaged by the tsunami
  • $20 million worth of grants-in-aid to nonprofits for facilities and maintenance

A Civil Beat analysis of the individual projects found the single-biggest item is $711 million ($539.8 million in 2012 and $170.9 million in 2013) for the State Educational Facilities Improvement Special Fund at the Department of Education.

Big-Ticket Projects

Some of the other big projects include:

  • $72 million ($10.3 million in 2012 and $61.5 million in 2013) for the Department of Education for “lump sum CIP for school building improvements statewide.” A description says the money may be used for such things as air conditioning, roof maintenance, painting, plumbing and furniture replacement.

  • $60 million ($50 million in 2012 and $10 million in 2013) for the University of Hawaii system for capital renewal and deferred maintenance statewide. A description says: “Projects to include capital renewal, reduction of maintenance backlog, major and minor renovations, modernization of facilities, re-roofing, mechanical and electrical systems, resurfacing, repainting, and other repairs and project costs to upgrade facilities.”

  • $48.4 million in fiscal 2012 to the Department of Transportation for Kahului Harbor. A descriptions says: “Plans, design and construction of a protruding pier structure dedicated to fuel transfer.”

  • $41.3 million ($3.75 million in 2012 and $37.5 million in 2013) to the Department of Transportation for structural improvements to a taxiway at the Honolulu International Airport.

Small-Scale Projects

On the opposite end of the spectrum, the smallest items include:

  • $1,000 in fiscal 2012 to the Department of Defense for Columbaria Niches at veterans cemeteries statewide. (Columbaria Niches are walls with recessed compartments designed to hold urns.)

  • $1,000 in fiscal 2012 to the Department of Transportation for “HMP programmatic management support.” A description says: “Consultant services during planning, design and construction of harbors modernization plan projects at harbor facilities statewide.

Funding Sources

The $2.9 billion will mostly be paid for using general obligation bonds. A mix of revenue bonds, federal funds, county funds and special funds will be used to cover the rest. Here’s a breakdown:

  • General funds: zero
  • General obligation bonds: $1.46 billion
  • General obligation reimbursable bonds: $4.5 million
  • Federal funds: $631.4 million
  • Special funds: $391.3 million
  • County funds: $8.5 million
  • Private contributions: $3.3 million
  • Other funds: $22.6 million

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