STATE OF THE STATE ADDRESS
DAVID Y. IGE
TO THE THIRTY-FIRST STATE LEGISLATURE
MEETING IN JOINT SESSION JANUARY 25, 2021
Thank you, Speaker Saiki, President Kouchi, members of the Legislature, and everyone who is joining us virtually today.
Good morning and aloha.
Twelve months ago, we met in the House Chambers planning for what we thought would be a very bright and promising year.
- State revenues were at a high of $8 billion,
- Our unemployment rate was the lowest in the nation, and
- We had our best credit rating ever from the bond market.
Literally overnight, our expectations were crushed by the coronavirus pandemic.
Hawaiʻi moved quickly. On Feb. 28, the Hawaiʻi State Laboratories were among the first in the nation to begin testing for the coronavirus. On March 25, we implemented a statewide stay-at-home order. And on March 26, we imposed a 14-day quarantine for travelers—again, one of the first in the nation.
But the virus was not to be denied. On March 31, we recorded our first fatality.
With so much to deal with, where do we begin? In spite of it all, I believe we begin with hope.
Hope, because there are safe and effective vaccines being distributed and more on the horizon. Hope because we have a president who believes in science and who has real empathy for the millions of Americans affected by this disease. Hope because all around us, there are everyday heroes.
Alofa Nua ran a small tire shop on Oʻahu with his wife Tanya, working seven days a week. He was young, healthy and full of life. Last March, he began feeling ill and developed a fever. That’s when he got tested for COVID-19. He thought it was just the flu, but he was wrong.
A week after being admitted to the hospital, he began to have trouble breathing. The doctors at Queen’s told him they would have to put him on a ventilator. In his words, they put him to sleep in March and he woke up in May. He was in the hospital for 7 ½ weeks.
During his stay, his heart stopped twice, his lungs collapsed, and his body was constantly fighting one infection after another. By all accounts, he should not be with us today. But he is—because of his own resilience and the love and support of his family.
More importantly, Alofa is a survivor because of the dedication, professionalism and sincere concern of his medical caregivers, who refused to let him lose his battle with the virus. They are the true heroes of Hawaiʻi. And there are many others, including our first responders and essential workers, who go to work every day, despite this deadly pandemic.
Here in Hawaiʻi, we have always counted on each other in good times and bad. Our past is filled with moments like this. We were at our best when we were looking out for each other—when we didn’t let others, or the times, tear us apart. This is who we are. This is who we’ve always been.
And so, we shoulder this mantle of shared responsibility for ourselves and for each other. We have a choice of letting this pandemic dictate our destiny or working together to create a brighter tomorrow. I ask you to join me in determining a new path to the future.
It was a year that changed life as we knew it. More significantly, it was a time when we lost so many—family members, friends, co-workers and neighbors. Our thoughts and prayers are with their families at this moment.
That’s why our most important responsibility right now is to protect the health and well-being of everyone in Hawaiʻi. That means having accurate, reliable and timely information. It means having an effective testing system to identify outbreaks and a comprehensive contact tracing network. It means having the resources to isolate those with the virus and to provide the medical care they need.
We will continue to take the tough actions necessary to keep our community safe, including the Safe Travels airport screening program. Hawaiʻi was among the first to demand pre-travel testing and quarantine procedures. That’s one of the reasons we lead the nation with the lowest COVID infection and death rates.
We are also implementing a comprehensive strategy for the distribution of vaccines in every county. We are getting vaccine to people where they live and where they are able to receive it. And we will be working with the Biden administration to expedite the distribution of vaccines to everyone.
My thanks to the Hawaiʻi National Guard and the private hospitals, who played such a large role in assisting us in so many areas.
I would also like to thank mayors Derek Kawakami and Mike Victorino – and former mayors Harry Kim and Kirk Caldwell – for their support and cooperation during this crisis. And I am grateful to mayors Mitch Roth and Rick Blangiardi for stepping in to continue this work.
Finally, protecting everyone’s health means staying the course—because we are far from being out of the woods. As I noted earlier, this responsibility is one that is shared by all. We must all continue to follow the three Ws:
- WEAR a mask
- WASH your hands, and
- WATCH your distance.
To those I would add, get vaccinated when it’s your turn.
And I thank you for your personal sacrifices.
Our Families’ Economic Well-being
But protecting our families’ health is only a part of taking care of their overall well-being. Our families are struggling just to survive. Hawaiʻi went from having the lowest unemployment rate to having one of the highest in just a few weeks. That’s why we have paid out more than $4 billion in unemployment benefits during the pandemic. That’s why distributing the federal CARES Act funds was a priority.
We are grateful for the assistance of the Senate and the House—especially Sen. Donovan Dela Cruz and Rep. Sylvia Luke—in helping us direct these monies to those who needed them, including:
- $75 million in restaurant cards for the unemployed,
- $25 million to small businesses for new products and markets,
- $3 million to support the commercial fishing industry,
- $61 million for PPE for business and educational institutions,
- $10 million for local PPE manufacturing,
- $15 million for childcare providers,
- $31 million for computers and connectivity for our students,
- $14 million to bring in nurses and healthcare workers, and
- $5 million for food assistance.
We also spent more than $71 million in housing assistance to about 13,700 households who would have otherwise faced eviction. This program was cited by Forbes Magazine as a model for the nation in getting rent checks to landlords faster than any other state.
Moreover, the pandemic underscored why having a steady supply of affordable housing is so important for our families’ well-being. We achieved our initial goal of building 10,000 new homes by 2020. But we need to do more. I am setting a new goal of 3,000 more units by the end of 2022.
We also want to make lands available to build affordable leasehold homes, particularly around the rail line. As I outlined last year, if we can reduce the cost of land, we could dramatically lower the overall cost of affordable housing in Hawaiʻi. I will be asking you to consider a bill to do just that. More importantly, the initiative would keep this supply of housing affordable forever.
We also want to invest more in capital improvement projects, adding infrastructure and roads that will allow us to develop more homes. To that end, I am asking my administration to take a sweeping look at how we generate affordable housing—from financing through construction. There are at least four agencies involved in housing that could benefit from better coordination and economies of scale.
In fact, construction has been the one bright spot during this pandemic. We expect to see investments of $1.1 billion in state capital improvement projects. Federal transportation projects—such as airports, harbors and highways—will add another $1.1 billion. And the private sector is expected to contribute another $10 billion and thousands of jobs to help restart our economy.
Also critical to our families’ well-being is the continuing education of their children. Transforming an entire public education system during a pandemic is no small feat. We started this school year with teachers and students embracing online learning. Our schools were provided guidelines on how and when to transition to blended learning and when they can safely return to the classroom.
Those decisions are being made by the individual schools. This ties in with ongoing efforts to move the DOE into a more school-based system. We want principals and educators—those most familiar with staff, students and their community—to be empowered to design schools of innovation that best meet their needs.
Last year, the Legislature established a School Facilities Agency to bring our aging school buildings into the 21st century. Even before the pandemic, the new agency was viewed as an exciting new initiative which will also provide jobs and economic opportunities for Hawaiʻi. The School Facilities Agency is a first step in maximizing school lands by building teacher housing, childcare facilities, after-school centers and other uses that are compatible with school facilities. It’s also part of a larger recovery plan, which I will get into shortly.
Building new schools also means jobs and is an integral part of our recovery and resiliency efforts. Working with all stakeholders, we plan to aggressively move forward on three pilot projects to serve as a model for the schools of the future.
During this pandemic, we’ve been forced to not only rethink the classroom but to take instruction beyond its walls. We’ve had to ask teachers to look for other ways to teach. And we‘ve had to ask parents and students to take a more active role in their own education. If the pandemic has taught us anything, it has shown us that it does take an entire village to educate a child.
In addition, the University of Hawaiʻi is also combining distance and in-person learning for its 50,000 students across all campuses. They are doing this while continuing to maintain a research engine generating more than $400 million for our economy.
At a time when government is being asked to be all things to all people, every state is facing historic revenue shortfalls. And so, from the beginning of this crisis, we’ve been monitoring its impact on the state’s finances and taking action. These actions have included:
- Reducing the current budget by $402 million;
- Transferring $345 million from our rainy-day fund; and
- Eliminating $350 million from state programs.
For the first time in our state’s history, we borrowed $750 million to help make payroll.
In spite of these significant measures, we are still projecting that revenues will not fully recover to pre-pandemic levels until 2024. Even with the most generous of federal assistance, it is a staggering deficit. But there are things we can do to reduce the pain.
Government will have to tighten its belt; our citizens will be asked to do more with less; and we will all need to help each other. Unlike past years, our main budget initiative will be to find ways to cover the historic shortfalls. There are many paths toward that end. I know there will be disagreements on how we get there. No one has all the answers. But the best answers lie in the ones we arrive at together—not in spite of each other, but because of each other. More than ever, we need to lean on that collective effort to manage this fiscal crisis.
I might add that the latest report from the state’s Council on Revenues projects our economy will outperform earlier dire predictions. The council now expects the state to generate nearly $6.3 billion in tax revenues for this fiscal year. That’s why we were able to adjust the DOE’s proposed reductions and now have about $123 million to restore to our classrooms. In a sea of bad news, that is good news indeed.
Short-Term Recovery Initiatives
In the meantime, we still have to find ways to revive our economy and do so as quickly as possible. There is no silver bullet and it will take time and perseverance.
The struggle for businesses to stay afloat during this pandemic has been daunting at best. Because of this, the state is planning to cover the interest payments on the $700 million DLIR loan on behalf of employers. That amounts to over $165 million that our businesses would otherwise have to make up over the next six years.
Hawaiʻi has been among the hardest hit states in terms of job losses and economic activity. More than 580,500 Hawaiʻi workers filed unemployment claims last year.
Moreover, in the face of a life-threatening virus, where is the sweet spot between ensuring the health of everyone and keeping the economy going? When the CDC is telling everyone not to travel, how do we sustain our hotels and all those small businesses who depend on our visitors?
The struggle to find that answer has been apparent. The problem is a complex one. It calls for flexibility and a willingness to turn on a dime. That is not something that government has been good at. It is something that we must get better at.
Last Spring in response to COVID-19, we launched a 14-day quarantine for travelers—something that the federal government is now looking to emulate with travel to the U.S. The quarantine was devastating to our visitor industry. But it was one of our most important tools to stem the pandemic through the Summer and Fall, when the nation’s infection rate rose exponentially. More importantly, it kept our families safe. And in the end, I believe, it also saved our reputation as a healthy visitor destination.
I believe the key to reviving our economy remains tied to the health of our community, no matter how slow and frustrating the process may be at times.
Long-Term Recovery Initiatives
The pandemic also exposed our local economy for what it is: very dependent on tourism. To make the state less vulnerable to sudden and unexpected changes, we must diversify.
We’ve been here before. In the 1970s, agriculture by itself couldn’t relieve us of our addiction to tourism. Neither will technology in the 21st century—not by itself. But it can be used to support a multi-pronged approach toward greater diversification—even as we move to get tourism back on its feet. I will continue to promote technology to help diversify our economy.
In addition, the pandemic has accelerated economic trends that were already underway. They include the rise in remote work and the demand for digital skills. These trends and the intervention of the pandemic show clearly where the future is. We must invest in our digital economy to be a player in that future.
More importantly, the pivot to a digital economy will serve as a foundation for our economic resilience. It will help us to better weather future disruptions, no matter the makeup of our economic engine. In a digital economy, it doesn’t matter where your workstation is located. In a digital economy, Hawaiʻi’s workforce can compete globally, contributing to higher wages and a higher quality of life.
More importantly, we can keep our kamaʻāina here to reverse the brain drain. Because, in a digital economy, our children won’t have to move to the mainland to secure good jobs.
But to do that, we will need to provide the right environment. Every government, business and nonprofit organization must embrace digital technology to thrive. We need to develop a clear vision for a more diversified and sustainable economy that is compatible with our culture and way of life. And that vision must be based on solid economic analyses.
A post-COVID Hawaiʻi cannot be a Hawaiʻi as it used to be.
That’s why, in the wake of the pandemic, I am calling for the creation of a program of action to not just reboot but to upgrade our economy. To create a Hawaiʻi 2.0, if you will.
I have asked Senate President Kouchi and Speaker Saiki to work with me, as well as business, labor and community leaders, to develop this program of action for Hawaiʻi’s future.
I have reached out to the Hawaiʻi Business Roundtable, the Hawaiʻi Executive Conference, the Chamber of Commerce of Hawaii, and the Hawaiʻi Community Foundation to convene stakeholders and communities from across the state.
I have also sought the counsel of governors Ariyoshi, Waihee, Cayetano, Lingle and Abercrombie for their thoughts on economic recovery. I have asked all of them for recommendations by April, which will be folded into specific actions by the third quarter of this year.
The Legislature will then have an opportunity to act upon these initiatives in their 2022 session.
The pandemic brought our economy to a screeching halt. But could it also be an opportunity to reassess our path forward? Opportunity takes on many disguises. Sometimes, it only waits for us to recognize it.
A critical part of re-programming our economy is also the creation of a healthy statewide broadband network. During the pandemic, the importance of broadband to everything that we do was made all too real. All of us dramatically increased online activities, such as online learning, telework, telehealth, and workforce development and training.
At the same time, a broadband hui, made up of more than 200 local stakeholders, met to find a path through the pandemic to the future. Their long-term goal aligns with the state’s in developing a broadband infrastructure that is accessible and equitable for all. My thanks to members of the hui and the State’s Broadband Officer, Burt Lum, and many others for their collective efforts to increase our connectivity both during and after the pandemic.
I can assure you that broadband will be a priority for the state in the coming years. I have directed Ed Sniffen, DOT Deputy Director of Highways, to accelerate his pilot project to connect rural communities to broadband service. He will be leveraging federal funds with state and private sector resources. The project will focus on Puna, Kaʻu, Hana, Nānākuli, Waiʻanae, Waimānalo, Kalihi and Kapaʻa. I am also directing my cabinet to implement projects to connect rural and underserved communities to similar projects.
Clearly, the pandemic has highlighted the digital inequity in Hawaiʻi. Part of our task is to make sure that a student in Nānākuli can access an online lesson plan as easily as a student in Kāhala—and that, in a digital Hawaiʻi, everyone’s connected. Likewise, with an FCC grant, we will support a telehealth initiative to connect low-income patients with high medical risks to healthcare providers. DHHL will receive at least $30 million in federal funds to benefit Native Hawaiians.
In addition, my legislative package this year includes a bill to create a Broadband and Digital Equity Office to oversee these efforts. This office will also enable us to identify and secure Hawaiʻi’s share of $7 billion in new federal funds for broadband infrastructure and digital equity programs.
The pandemic has made it painfully clear that life in the future will be ALL about being connected.
Finally, my friends, we are at a historic crossroad—because of the pandemic and because of new leadership in Washington D.C. The latter is a source of rising hope and great expectations.
Seventy-five years ago, our parents endured a global war that cast one of the darkest shadows over the free world. Their response was historic. It became their most enduring legacy to all of us. Today, we have a chance to Pay It Forward.
This public health crisis has forced us to look down a different road. But it has not determined where that road will end. That has always remained in our hands. The pandemic has not forced us to change. That we must do on our own to address the challenges we face. But our strength lies in something deeper than those superficial changes. It lies in who we have always been as a people. Hawaiʻi is all of us poured into this vessel—a pot that doesn’t melt away our differences but highlights them, emphatically and proudly. That is our strength.
Hawaiʻi is John Burns, Dan Inouye, Barack Obama, Nona Beamer, ʻIolani Luahine, Chinn Ho, Benny Agbayani, Michelle Wie, Marcus Mariota and Kolten Wong.
Hawaiʻi is the hundreds of small family businesses that make up the real backbone of our economy.
It is Kalākaua Avenue and Kalihi Street on Oʻahu, Front Street and Main Street on Maui, Aliʻi Drive and Kinoole Street on Hawaiʻi Island, and Kūhiō Highway that stretches from Kapaʻa to Hāʻena on Kauaʻi.
It’s watching your son playing little league baseball and your daughter scoring a soccer goal.
It’s the smell of a thousand lei at graduation and the swell of pride from beaming parents.
And it‘s quiet moments—away from the rush of activities—when you get to savor life at its fullest—when you think to yourself: This is what it’s all about. This makes it all worthwhile.
Because we are here. We are Hawaiʻi.
In these dark times, with the pandemic knocking us back on our heels, it is not enough to occasionally show aloha. We must have aloha for each other—at all times.
We all have jobs to do—you, me, everyone in Hawaiʻi—to lift ourselves and each other back up into the sunlight. Let us not waste another moment. Join with me in meeting this challenge.
Thank you and aloha.