Hawaii's Green Fee projects face funding shift to bond financing
Hawaii's governor has proposed a shift in how the state will fund its first 18 environmental projects under the Green Fee program. Instead of relying on new tax revenue, Gov. Josh Green now wants to use debt financing—specifically, general obligation bonds—to cover the $42.2 million cost. The change has sparked debate among lawmakers as the legislative session continues.
The Green Fee program began in 2025 after the state raised the transient accommodations tax to generate extra revenue. Initially, the administration planned to use this tax money—projected at $87 million annually—to pay for all projects in the current and next fiscal years. But in late January, the governor updated his budget request, seeking bond funding for the current year's projects while keeping general funds for next year's.
All 18 proposed projects qualify for bond financing, as they involve capital improvements. Sabrina Nasir, deputy director of the state Department of Budget and Finance, explained that bonds would give the state more time to spend the allocated funds. However, the switch would also add interest costs to the projects.
By February 15, 12 of the 18 projects had already been approved by the Legislature, with four still awaiting final sign-off. The governor's new approach would free up cash originally earmarked for these projects, potentially allowing the money to be used elsewhere. Yet some senators, including Donovan Dela Cruz, criticised the plan, calling it misleading and improper.
The final decision on using bonds now rests with the Legislature during its current session.
The proposed shift to bond financing would change how Hawaii funds its first Green Fee projects. If approved, the move would increase overall costs due to interest but could also redirect cash for other state priorities. Lawmakers will decide whether to adopt the governor's plan in the coming weeks.
