The State’s obligation to all Hawaiians


Source: June 2009 Ka Wai Ola Column

Towards the end of this past legislative session, the OHA general funds budget was completely cut by the Senate Ways and Means (WAM) committee chair Senator Donna Mercado Kim.  While it is still possible that the funding will be at least partially restored (the legislative session will not be over at the time of this writing), I was disappointed to hear the reasons why the WAM Chair felt the cuts could be justified.

The WAM Chair argued that: (1) OHA has $300 million in its trust fund; (2) OHA has $15 million in its fiscal reserve fund; (3) OHA receives $15.1 million a year in ceded lands payments; and (4) OHA received $2.03 million for a legal settlement from the Hokulia case from the Native Hawaiian Legal Corporation (NHLC).  However, the WAM Chair did not take into consideration other circumstances such as:

  • OHA’s trust fund has lost almost $150 million, or 30% of its value, from its peak in late 2007.
  • OHA’s Spending Policy puts an annual cap of 5% on withdrawals from our trust fund, so there can be no further withdrawals.
  • OHA had already agreed to reduce its budget by 20%, like all other state agencies, at the legislature’s request.  Now they are proposing to cut 100% of our budget.  Where is the fairness in that?
  • The OHA Fiscal Reserve Fund is not a “rainy day” fund and is actually part of our trust fund.  It was never meant to be used to make-up budget shortfalls.
  • OHA’s matching funds for the Native Hawaiian Legal Corporation only entitles us to about half of the total $2.03 million the NHLC received for the Hokulia settlement.  Therefore, OHA will only receive about $1 million.

In addition, the $15.1 million ceded land payments that OHA receives annually are part of the state’s legal obligation to pay OHA for its 20% pro rata share of income from ceded lands.  The Attorney General has made it clear that the Hawaii Constitution makes OHA trustees, not the legislature, responsible for determining how the Native Hawaiians’ portion of ceded land revenues is spent.  The Attorney General has also stated that OHA’s share of ceded land revenues belongs to Hawaiians and is not “public money.”

The WAM Chair also ignores the fact that the OHA budget was designed more than 16-years ago by the Governor and the State Legislature to contain both general funds and trustee approved matching trust funds so that it can better the condition of all classifications of Hawaiians:  (1) those with at least 50% blood quantum under the Hawaiian Homes Commission Act of 1920 and (2) any descendants of the aboriginal peoples inhabiting the Hawaiian Islands in 1778.  This blending of funds was thought to be the most effective way to allow OHA to serve the entire Hawaiian population, estimated at the last census to be 400,000 nation-wide.  OHA will not be able to provide the same level of services to such a large population without the assistance of additional general funds from the state.

The WAM Chair needs to realize that OHA funds a wide range of programs relating to Education, Health, Human Services, Housing, and Economic Development, just to name a few.  For the sake of comparison, while OHA may have $300 million in its trust fund, Kamehameha Schools spend more than that in just one year — only on education!

OHA has also subsidized the loss of legislative funds to the Department of Hawaiian Homelands, which by law must be funded by the Governor’s budget.  Other state departments that have been funded by OHA include the state departments of Education and Health.

Finally, cutting the funding to Na Pua No’eau is simply cruel and would destroy a leader in Hawaiian culture-based education.  The WAM Chair needs to think about the 1,500 Hawaiian students, their families, 80 teachers that will be adversely affected.

The actions by the WAM Chair shows why OHA needs to constantly educate the legislature on Hawaiian history and culture and Hawaiian rights.  But it wasn’t always this way — There was time when legislators made it a point to be educated on Hawaiian issues and were all well aware of why OHA was created during the 1978 Constitutional Convention. 

It was very clear to the legislators and the governors who served from 1978 to 2000 that the legislative funds that OHA was to receive were to serve the Hawaiian population with less than 50% blood quantum.  This promise was made because the law, Chapter 10 of the Hawaii Revised Statues, made it clear that the ceded land revenues are to serve Hawaiians with a 50% blood quantum.  The law ended up creating two classifications of OHA beneficiaries, but funded only one of those beneficiaries.  This is why legislative funds have been sought since 1980.

It is clear that the across the board “slash & burn” of OHA’s budget by Senator Donna Mercado Kim is without conscious or careful thought regarding the special circumstances that governs the Office of Hawaiian Affairs.  If you are outraged by this action, please write to Senate President Colleen Hanabusa and your state senators and representatives.  Aloha Ke Akua.