Spending the kālā

Last week the Governor of the State of Hawai‘i, David Ige, came to the podium to announce how he was going to spend down the millions of dollars the state has at hand from the CARES act funding given to Hawai‘i.

As some may know, the state has been slow in spending down the money, so much so that even members of the Congressional delegation of Hawai‘i in Washington, as well as a Congresswoman who oversees the funding, sent a letter to the Governor demanding that he answer the simple question of “how are you spending down CARES money?”

This is not a trivial question. And the eventual answer to the question revealed to this writer what the state was trying to do all along with the money. One reveal: it seems our state administration was not paying too close attention to what was happening in reality.

When the CARES money came to Hawai‘i in April, the first people to grab it and figure out how to distribute it was the Hawai‘i State Legislature. In their abbreviated session, they directed the Governor to spend approximately $630 million of the funds on various things to help people and the economy.

When the bill to direct all this funding got on the desk of Governor Ige, he said he was not in favor of spending the money the way the Legislature directed, and instead decided to hold onto the money.

So, by July, we had millions of dollars of CARES money ready to deploy, and the Governor says “no”. Okay, why?

Succinctly put, and this comes from various statements that he made about the expenditure of the money in July, he figured more money was coming from Congress, but if not he might have hoped there was a chance to convert CARES money from that of a grant to the state to that of a direct outlay to the state

(Let’s explain the nuances of this. When a state is awarded a grant, like how CARES money is allocated, the state needs to request from the Federal Reserve an outlay of cash that it intends to spend. You cannot just ask for all the money at once. You need receipts or notices of encumbrance to request the money. And you are only allowed to ask for the amount that you can prove you will spend. Furthermore, that money that you do get cannot just sit in a bank account, you have to get that money out as soon as possible to whatever item it needs to be spent on. What some states were hoping is that Congress, in due time would change CARES money from that of a grant to that of a direct outlay with “no strings attached”.)

When both the HEROES act stalled in Congress (to this day, which by the way is a direct outlay and not a grant to states), as well as the realization that Congress was not going to convert CARES money from that of a grant into an outlay, the State of Hawai‘i by August, was stuck trying to figure out what to do.

And the pressure was building. The economy continued to collapse as certain CARES funding items expired. The City and County of Honolulu were forced into a second shutdown while the entire Department of Health was in meltdown. And the Lt. Governor was running around telling everyone that doomsday was coming and to batten down the hatches.

Given two months later from that, and a lot of very strained events, the state finally came up with a plan to reopen the state and execute that reopening. The realization that no bags of money were coming down and that monies that the state was allocated as a grant better be used by December 31 seemed to slap some wisdom in our leaders to “get a move on”.

This leads this writer to wonder “was anyone paying attention to what was going on in Washington when it came to CARES and HEROES money?”. It was apparent by at least the end of July if not the start of August, to anyone that was paying attention, that whatever was wished for in April was not coming to pass.

Now provided there may have been some wishful thinking – the people would rise and demand something happens. That the situation in America would become so dire that Congress would need to act, or that “for the good of all” an agreement would be reached.

None of that happened. A good swath of the country started to reopen and stay open. The pressure on putting more stimulus into the economy was lessened by the fact the stock market had stabilized and people’s 401K’s were getting recharged. And while many were still out of work, the unemployment insurance situation started to stabilize for many states, allowing people to get funded quicker.

And the question that is left is “did Ige pay attention to any of this?” We may never truly know, but as with many things, the proof is in his and his administration’s actions.