Health funding in Gov Ige’s 2021-23 budget proposal

Gov. David Ige’s newly released 2021-23 biennium budget proposal features operating and capital improvement program (CIP) budget cuts over the next two fiscal years.

“This budget represents sudden, sharp reductions to revenues because of the pandemic’s impact on the state’s economy and the tax revenue that funds government services and programs.  Our economy will recover, and the state’s budget will normalize if we contain COVID-19, preserving the health of both residents and visitors,” said Gov. Ige in a statement.

In terms of general funds, Ige’s operating budget proposal includes $7.69 billion in FY 22 and $7.80 billion in FY 23. Compared to FY 21, this represents a net decrease of 4.5% ($361.9 million) in FY 22 and a 3.1% decrease ($249.6 million) in FY 23.


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Major general fund adjustments outlined in the budget include a $603.3 million decrease in health premium payments and a $19.2 million decrease in retirement benefit payments over the next two fiscal years, among other changes.

Despite cuts to the budget, the proposal also lays out a series of health-related items that lawmakers will evaluate once the 2021 legislative session begins.

Under social services, the budget adds $89.6 million in general funds to increase Medicaid health care payments and $5.4 million to increase General Assistance payments to meet enrollment increases. It also adds $500,000 in FY 22 for rental assistance services under the state’s Rent Supplemental Program. As part of the proposal, Ige is also recommending the elimination of 78 permanent positions under the department.

The budget adds $4.3 million in both fiscal years for salaries for new positions at the new Hawaii State Hospital forensic building, $6 million in FY 23 to increase the state match for the Medicaid 1915 Waiver for Individuals with Intellectual and Development Disabilities to accommodate new enrollees and growing provider rates, and $35.9 in both fiscal years for the Hawaii Health Systems Corporation’s regional operations.

The CIP budget proposal also includes health-related investments such as $161 million in general obligation bond infusions for housing projects, $44 million for renovations to health system facilities on all islands, and $10 million for public housing development and improvements across the state.

The budget states Ige may request emergency appropriations for FY 21 and FY 22 to support COVID-19 mitigation efforts such as hospital surge staffing and vaccine implementation. The state currently estimates these costs will total $205 million (FY 21) and $182 million (FY 22), but that they are subject to change as new information becomes available.

The legislature will consider the budget proposals when it convenes for the 2021 legislative session on January 20th.