Governor Josh Green outlines affordability, tax cuts and budget priorities in State of the State

Governor Josh Green told a joint session of the Hawaii State Legislature on Jan. 15 that the “state of Hawaii is strong” and laid out priorities for the new legislative session, centering on affordability, housing, homelessness, health care and climate resilience.

The governor said affordability remains the state’s top concern and highlighted tax measures passed in recent years that he said will deliver substantial savings to families. He described a multi-year income tax reduction he and the Legislature approved as the largest in state history and said it will provide an estimated $5.6 billion in total tax savings over the next seven years.

Why it matters: The governor framed tax cuts and other measures as tools to keep families in Hawaii and stimulate the economy, tying fiscal policy to broader goals for workforce and population retention.

In his remarks, Governor Josh Green said the state doubled the earned income tax credit and the food tax credit and increased dependent exemptions, measures he said saved Hawaii families about $88 million per year. He said a family of four earning the state median income of $88,000 will see take-home pay rise by more than $3,600 annually once the tax changes are fully implemented.

The governor said lawmakers reduced state spending by $500 million in fiscal 2024 and $1 billion in fiscal 2023 without cutting needed services, and that the state has maintained a $1.5 billion “rainy day” fund. He asked the Legislature to continue pursuing affordability measures while advancing investments in housing, homelessness services and health care.

He closed by urging lawmakers to remain “one ohana” in pursuing the priorities he outlined.