SB 2809: Governor; Budget-Related Reports; Program Memoranda; Variance Reports; Program Size Indicators; Effectiveness Measures; Reviews; Updates

A BILL FOR AN ACT

relating to budget-related reports.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 37-70, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  [Not] No later than the third Wednesday of January of each odd-numbered year, the governor shall submit to the legislature and to each member thereof[,] a program memorandum covering each of the major programs in the statewide program structure[.]; provided that the governor shall ensure that each program memorandum submitted pursuant to this section accurately reflects the current responsibilities of the applicable program, addresses the current and future needs of the State, and aligns with the information submitted pursuant to section 37-71 by reviewing and updating, as necessary, the most recently submitted program memoranda.  Each program memorandum [will] shall include:

     (1)  An overview of the program as a whole, including a discussion of:

          (A)  Objectives[.];

          (B)  Component programs[.];

          (C)  Departments involved[.];

          (D)  Relationships to other agencies and jurisdictions[.];

          (E)  Major activities[.];

          (F)  Important external developments affecting the program[.];

          (G)  Significant discrepancies between previously planned cost and effectiveness levels and those actually achieved[.]; and

          (H)  Trends and comparisons in costs, effectiveness, or activity data over the budget and planning period[.];

     (2)  A statement of the major program changes being recommended for the budget and planning period to include for each proposed change:

          (A)  A brief statement of the recommended change[.];

          (B)  The cost and program performance consequences of the change over the budget and planning period[.]; and

          (C)  A summary of the analytic rationale for the change[.];

     (3)  A discussion of emerging conditions, trends, and issues, including:

          (A)  Actual or potential impact on the State and its programs[.];

          (B)  Possible alternatives for dealing with the specific problems occasioned by the emerging conditions, trends, and issues[.]; and

          (C)  Suggestions for a program of analyses to resolve the most urgent of the problems[.]; and

     (4)  Appendices as needed to include appropriate issue papers, special analytic studies, other reports, and crucial source data."

     SECTION 2.  Section 37-75, Hawaii Revised Statutes, is amended to read as follows:

     "§37-75  Variance report.  Not fewer than thirty days prior to the convening of each regular session [of the legislature], the governor shall submit to the legislature and to each member thereof a report on program performance for the last completed fiscal year and the fiscal year in progress.  In format, the report generally shall follow the fiscal requirements portion of the executive budget or budgets.  The report shall include:

     (1)  At the lowest level of the program structure, for each program contained in the budget finally approved by the legislature for the last completed fiscal year and the fiscal year in progress:

          (A)  A comparison, by the operating and research and development cost categories, of the budgeted expenditures and the actual expenditures for the last completed fiscal year and the budgeted expenditures and the estimated expenditures for the fiscal year in progress;

          (B)  A comparison, for the operating and research and development cost categories, of the budgeted expenditures and position ceiling and the actual expenditures and positions filled in the last completed fiscal year and a comparison of the budgeted expenditures and the position ceiling for the fiscal year in progress and the actual expenditures and number of positions filled in the first three months of the fiscal year in progress and the estimated expenditures and number of positions expected to be filled in the remaining months of the fiscal year in progress;

          (C)  The program size indicators and a comparison of the program size anticipated and the size actually realized in the last completed fiscal year and the program size anticipated and the size estimated for the fiscal year in progress; provided that the governor shall ensure that each program size indicator used herein accurately reflects the current responsibilities of the applicable program, addresses the current and future needs of the State, and aligns with the information submitted pursuant to sections 37-71 and 37-72 by reviewing and updating the most recently used program size indicators, as necessary;

          (D)  The effectiveness measures and a comparison of the level of effectiveness anticipated and the level actually attained in the last completed fiscal year and the level of effectiveness anticipated and the level estimated for the fiscal year in progress; provided that the governor shall ensure that each effectiveness measure used herein accurately reflects the current responsibilities of the applicable program, addresses the current and future needs of the State, and aligns with the information submitted pursuant to sections 37-71 and 37-72 by reviewing and updating the most recently used effectiveness measures, as necessary; and

          (E)  A narrative explanation of the significant differences for the last completed fiscal year in each of the comparisons made in subparagraphs (A), (B), (C), and (D), including an explanation of the basis upon which the original estimates were made and the reasons why the estimates proved accurate or inaccurate, and a statement of what the actual experience portends for the future of the program in terms of costs, size, and effectiveness;

          provided that expenditure amounts in the comparisons shall be shown to the nearest thousand dollars;

     (2)  Appropriate summaries at each level of the state program structure for each major grouping of programs encompassed therein, showing:

          (A)  A comparison of the total budgeted expenditure and the total actual expenditure for the last completed fiscal year and the total budgeted expenditure and the total estimated expenditure for the fiscal year in progress; provided that the expenditure amounts shall be shown to the nearest thousand dollars;

          (B)  The effectiveness measures and a comparison of the level of effectiveness anticipated and the level actually attained in the last completed fiscal year and the level of effectiveness anticipated and the level estimated for the fiscal year in progress; and

          (C)  A narrative explanation summarizing the major reasons for the differences in the comparisons made for the last completed fiscal year in subparagraphs (A) and (B); and

     (3)  A narrative explanation of the significant variations in capital improvement costs; provided that capital improvement project variances shall be referenced to the six-year program and financial plan, which shall contain the information specified in section 37‑69(d)(1)(K)."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

Governor; Budget-Related Reports; Program Memoranda; Variance Reports; Program Size Indicators; Effectiveness Measures; Reviews; Updates

Description:

Requires the Governor to ensure that the Governor's program memoranda and variance reports accurately reflect the current responsibilities of certain state programs, address the current and future needs of the State, and align with budget-related submittals.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 2749

Honolulu, Hawaii

RE:     S.B. No. 2809

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B. No. 2809 entitled:

"A BILL FOR AN ACT RELATING TO BUDGET-RELATED REPORTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to increase the relevance and accuracy of certain budget-related reports.

     Specifically, this measure requires the Governor to ensure that the Governor's program memoranda and variance reports accurately reflect the current responsibilities of state programs, address the current and future needs of the State, and align with budget-related submittals.

     Your Committee received written comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that ensuring that the data in budget‑related reports is accurate will allow the Legislature to confirm that state programs are using public money efficiently and effectively.  Your Committee further finds that designating the Governor as the official who must ensure the accuracy of reported data will increase accountability in state budgeting.

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2809 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

STAND. COM. REP. NO. 2150

Honolulu, Hawaii

RE:     S.B. No. 2809

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Government Operations, to which was referred S.B. No. 2809 entitled:

"A BILL FOR AN ACT RELATING TO BUDGET-RELATED REPORTS,"

begs leave to report as follows:

     The purpose and intent of this measure is to require the Governor to ensure that the Governor's program memoranda and variance reports accurately reflect the current responsibilities of certain state programs, address the current and future needs of the State, and align with budget-related submittals.

     Your Committee received comments on this measure from the Department of Budget and Finance and Tax Foundation of Hawaii.

     Your Committee finds that the Governor is required to submit to the Legislature program memoranda and variance reports regarding the budget and operations of each of the executive agencies.  However, your Committee further finds that on multiple occasions the data submitted in these reports was inaccurate and that the Department of Budget and Finance also recognizes this issue.  This measure will increase the transparency and accountability of the Executive Branch by requiring the Governor's program memoranda and variance reports to be relevant, updated, and accurate every year.

     As affirmed by the record of votes of the members of your Committee on Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2809 and recommends that it pass Second Reading and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Government Operations,