The DOE Is Giving Up $465M In School Construction Funds. What Happened?


Lawmakers who managed to get projects funded for their neighborhood schools are upset, and want to know why the money […]

Lawmakers who managed to get projects funded for their neighborhood schools are upset, and want to know why the money won’t be spent as they intended.

The state Department of Education plans to surrender $465 million that lawmakers had earmarked for school construction projects across the state, a move that will delay and possibly jeopardize funding for new classrooms, play courts and athletic facilities.

That decision may make more money available for other state initiatives such as affordable housing or the Maui wildfire recovery, but that would come at a cost to Hawaii’s public educational system.

The move by the DOE to lapse so many capital improvement projects has upset state lawmakers who lobbied hard to secure state funding for school projects for their districts, only to learn that funding is about to slip away because the projects did not move forward in time.

“I don’t understand why this is happening,” said House Speaker Scott Saiki. “This is a big problem. If anything, DOE should come to the Legislature and say, ‘We can’t handle all of these projects for the following reasons,’ and just be honest about it.”

The House Finance and Education committees have scheduled a public briefing at 2 p.m. Thursday to question top officials in the DOE and the Department of Budget and Finance about plans to lapse funding for the DOE projects.

Lawmakers at the state Capitol are upset that money they appropriated for public school projects will instead lapse, which can cause the school projects to stall. (David Croxford/Civil Beat/2023)

Funding for state construction projects generally has a shelf life of three years, after which the money lapses and the appropriations are no longer valid. The Legislature then has the option to vote to re-appropriate the money to make it available for a longer period, or divert the funding to other things.

The DOE said in a written statement Tuesday that it “submitted a list of projects totaling $465 million that it proposed be allowed to lapse to free up project funding for other state priorities.”

The department prioritized the projects on its books, proposing that work continue on those that are already in construction, are ready to begin construction or are needed to comply with gender equity requirements or the federal Americans with Disabilities Act, according to the statement.

Projects that still need permits or had appropriations for money that could not be encumbered by the end of June “were identified as projects to suspend and lapse, with the understanding that the legislature may consider reappropriating their higher priority projects,” the DOE said.

State Rep. Ernesto “Sonny” Ganaden said lawmakers spent years consulting with their communities, planning and advocating for the projects the DOE is now proposing to defund. “Letting these things lapse, it brings us back to square one, or even worse now,” he said.

“I don’t see how it’s justifiable to lapse half a billion dollars of taxpayer money,” Ganaden said.

Ganaden represents Kalihi, where the DOE has indicated it intends to lapse more than $57 million for Farrington High School that the House and Senate had earmarked for construction of new classrooms, a music building, a school gymnasium and related work.

In fact, Ganaden said three of the schools with projects on the lapse list are schools in his district, which has a high percentages of low-income students.

“These are some of the most needy communities that aren’t getting improvements in their schools,” he said. “It affects the way we talk about flight to private schools, and working families’ decisions to move to the mainland because of the lack of improvement in public schools here.”

“It seems like for once the politicians have done their job, but the DOE hasn’t,” he said.

However, state Rep. Amy Perruso said she believes DOE is lapsing school construction projects to make more construction money available to fund the recovery from the deadly Maui wildfires. “We could see that coming because of what happened in Lahaina,” she said. “I’m not surprised at all.”

State Budget Director Luis Salaveria did not respond to a request for an interview, and when asked in writing if the Department of Budget and Finance instructed the DOE to lapse projects to free up funding for other uses, the department replied with a statement that did not directly answer the question.

House Speaker Scott Saiki said he does not understand why the Department of Education plans to lapse so many school projects. (David Croxford/Civil Beat/2023)

Instead, the department issued a written statement Tuesday explaining that “DOE approached B&F several months ago and flagged that close to $900M in CIP funds were scheduled to lapse on June 30, 2024.”

“The DOE has had two or three years to encumber the money but has not done so,” it said. “Discussions were ongoing between B&F and DOE for several months and the lapse number that was finally decided between B&F and DOE was $465M.”

The statement also said state budget officials “advised the DOE to work through these capacity and planning issues so that they can develop a (construction) expenditure plan that they can execute appropriately.”

“Projects that the DOE would like to continue and has capacity for can be reauthorized this session, pursuant to the Legislative approval, with a longer lapse date,” the department wrote. 

Saiki said the DOE has not approached him to ask for help or warn the Legislature that the department does not have enough staff to process and manage the school appropriations.

“I just don’t understand why so many projects are on the lapse list,” he said. “They’ve been on the books for three years, some of them have been on the books for longer than three years because they’ve been re-authorized over the years.”

The new DOE lapsing plan would result in Waipahu losing more than $22.5 million earmarked for design and construction of a new classroom building at August Ahrens Elementary School, and $14.77 million appropriated for an academic center for students at Waipahu High School focused on health care.

“It’s really disappointing to hear the news of these impending lapses impacting communities like Waipahu. Schools in our area have generally been at the top of the largest enrollments in the state, and the planned facilities looked to address these needs,” state Sen. Henry Aquino, who represents Waipahu, said in a statement.

Also on the DOE lapse list are $19.5 million for a new library and administration building at Helemano Elementary School in Whitmore Village, more than $3 million for renovations of an athletic facility at Leilehua High School, and $3.47 million for expansion of an administration building at Iliahi Elementary School.

Those projects are all in the Central Oahu district represented by Senate Ways and Means Chairman Donovan Del Cruz, but Dela Cruz did not respond to a request for comment.

Civil Beat’s education reporting is supported by a grant from Chamberlin Family Philanthropy.

Read the list of proposed projects to lapse here:

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