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Kent says state’s loan request compromised by ‘vanishing economy’

This is the time of year when state officials send off their “Christmas wishlist” to banks in an effort to secure funding for future projects. Their wish this year: $750 million. 

However, in making their requests, they disclose “a lot more information to the banks than they typically do to us,” said Joe Kent, Grassroot executive vice president, speaking last week with radio host Rick Hamada on KHVH NewsRadio 830. 

Kent said the state’s latest financial disclosure shows that the state’s expected $3 billion surplus for this year “went poof” and is now expected to be only $600 million, then will dwindle to $300 million next year.

He said most of the money was lost to “our vanishing economy,” which described as “much more sluggish than anyone thought,” with its anticipated 5% or 6% revenue increases for 2023 clocking in at only 1%. 

He noted that the state’s financial statement showed the state’s spending decreasing by 20% over the next five years, but wondered if that was just wishful thinking.

A looming unknown, Kent said, is how much it will cost to respond to the tragic Lahaina wildfires in August. Expected expenses include wildfire mitigation, housing for displaced residents once federal funding dries up, and proposed separate lawsuit funds for perished and displaced victims. 

“There’s an asterisk on that part of the budget in the documents because they don’t really know how much that they’re going to spend,” he said.

Kent said another problem with the state’s large loan request is that it would be taking on a large amount of debt at a time when we have “the highest interest rates since 2001.” 

“That’s dollars — taxpayer dollars — not going to bridges and buildings or anything; it’s just going to the bank,” he said. “Even homebuyers don’t want to take that [kind of debt] out. So why does the government want to?”

Kent and Hamada also talked about Gov. Josh Green’s first year in office; the state Department of Education’s inability to spend all of the $900 million appropriated to it for necessary building additions and repairs; and the $400 million proposed to build a new Aloha Stadium.

To hear the entire 22-minute interview, click on the image below.

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