Rethinking How We Fund What Matters
BLUF: The takeaway from the infographic isn’t that Hawaiʻi should spend more money.
It’s that better funding design leads to better results.
Persistent underspending across years tells us the same thing again and again:
Some programs aren’t suited to one-year budgeting.
Thoughtful, targeted, dedicated funding, used carefully and transparently, can help Hawaiʻi turn approved budgets into tangible outcomes for the people they’re meant to serve.
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What the Budget Numbers Reveal
Across multiple years and different administrations, state budget reports show a consistent pattern: some long-term programs use far less of their funding than planned—often 30–55% less.
This shows up most clearly in areas like:
Workforce development
Housing and land development
Unemployment and labor programs
Research, data, and long-term planning
Disaster preparedness and recovery
Importantly, this pattern repeats over time. That tells us something critical: this isn’t about one agency or one bad year, it’s structural.
Why This Happens (And Why It’s Not a Scandal)
The word “underspending” can sound alarming, but in many cases, it doesn’t mean money was wasted or that programs weren’t needed.
Instead, it reflects a mismatch between annual budgeting and the real-world timelines of programs.
Many public programs:
Take longer than a year to hire staff
Require lengthy procurement and contracting
Depend on federal funds that arrive late or have strict rules
Involve multi-year construction or infrastructure work
When funding is locked into a one-year clock, money can expire before the work is realistically ready to happen.
In other words, the system was designed for short-term spending rather than long-term solutions.
What Is Dedicated (or Special) Funding?
Dedicated funding, often referred to as a special fund, is money set aside solely for a specific purpose, with rules that permit its use over multiple years if necessary.
This isn’t a new or radical idea. Hawaiʻi already uses dedicated funds for things like:
Transportation
Environmental protection
Housing and infrastructure
Hawaiʻi law explicitly allows this approach. Under the Hawaiʻi Constitution (Article VII) and Hawaiʻi Revised Statutes §37-52, the Legislature can create special funds when revenues and spending are closely tied to a specific purpose.
How Dedicated Funding Improves Outcomes
When designed properly, dedicated funding allows programs to:
Plan beyond a single fiscal year
Hire and contract without rushing or stalling
Align spending with real project timelines
Focus on outcomes instead of artificial deadlines
The result isn’t more spending, it’s more effective spending.
But What About Oversight? (A Fair Question)
The key point is this: dedicated funding changes how oversight works, not whether it exists.
People often worry that dedicated funds could reduce accountability or allow agencies to “sit on money.”
Those concerns are valid, and Hawaiʻi law already addresses them.
Even with dedicated funds:
The Legislature still controls appropriations
Spending must follow specific legal purposes
Reporting and audits are required
Oversight can be scaled to the size and risk of the program
In many cases, department heads can be entrusted to responsibly manage these funds.
For larger or more complex programs, independent oversight boards may be a suitable option.
Why This Matters to Everyday People
For residents, the impact is very real:
Services arrive faster
Fewer projects stall mid-way
Programs are more predictable
Public dollars go further
When funding matches reality, communities feel the difference.
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Sources referenced in this analysis include:
This analysis was prepared by The Learning Observatory to support informed, nonpartisan public understanding of Hawaiʻi’s policy choices.