DHHL presents FY2026 budget priorities, highlights restoration of 19 funded positions

The Department of Hawaiian Home Lands (DHHL) presented its fiscal year 2026 budget materials to commissioners on June 12, outlining operating funding, trust and special-fund balances and staffing plans ahead of a Monday approval vote.

Deputy to the chair Katie Lambert, presenting the administrative and operating portion, said the state fiscal year begins July 1 and that DHHL will ask the commission to approve the FY2026 budget at the next meeting. "We will have all 200 general funded positions funded" starting July 1, Lambert said, noting the legislature restored funding for 19 previously authorized but unfunded positions.

Why it matters: the restored positions and the operating budget determine DHHL's ability to process leases, manage homestead services and move pending development projects. Commissioners pressed staff for timelines and additional program detail during the workshop.

Key budget items and context

Lambert summarized DHHL's internal funds as two special funds, five trust funds and two revolving funds that feed the department's operating and program activity. She said HB300 (the 2025 state budget bill) had not been signed at the time of the workshop and was on the governor's list for potential line-item vetoes, though staff said they were not aware of any vetoes specifically affecting DHHL programs.

Lambert identified the department's major fund sources and uses: - General funds (the primary target of the department's legislative requests) for administrative and operating (A&O) costs. - The Hawaiian Home Lands Administration (admin) account for operating costs and supplementing general funds when needed. - The Hawaiian Home Lands Revenue Special Bond Fund for bond debt service and reserves. - The Hawaiian Home Lands Trust Fund and the Native Hawaiian Rehabilitation Fund (NERF) for loans, rehabilitation and programmatic grants.

Lambert noted a $10 million general-fund appropriation the legislature provided for services to existing homestead communities; DHHL plans to apply that appropriation to rehabilitation (purpose 3) rather than drawing on the NERF trust balance. "We are not tapping into [NERF]" for FY2026 because the department will use the $10 million general-fund appropriation for those purposes, she said.

Staffing and vacancies

Lambert told commissioners that of the 181 general-funded positions in DHHL, 35 were vacant at the time of the presentation; adding the 19 newly funded positions would create a total of 54 vacancies to fill. She added there are additional federally funded positions (including 12 NAHASDA-funded positions and three broadband positions recognized by the legislature), bringing the department headcount to about 215 when those are included.

Commissioners and staff discussed recruitment hurdles, particularly for outer-island district offices, and asked staff to provide clearer outreach strategies. Commissioner Kaneko urged the department to spell out concrete steps it will take to recruit and retain employees, and to explain how commissioners and the public can help identify candidates.

Operating totals and special-fund notes

Lambert said the department's FY2026 total operating budget is approximately $52,800,000. She explained a 2026 anomaly in the special-fund column — roughly $97 million in a special-fund ceiling adjustment — stems from a mechanical fiscal transfer and the legislature raising a special-fund ceiling to allow DHHL to encumber previously unavailable monies through 06/30/2026.

Staff emphasized that while some trust accounts (notably NERF) have low balances, the decision to use general funds for purpose 3 reduces reliance on those trust balances during FY2026. Lambert said non‑appropriated (trust) funds planned to be used in FY2026 total roughly $13,000,000 and that the DHHL revenue bond special fund remains about $3.2 million, consistent with prior years.

Uncertainties and next steps

Lambert cautioned the commission that HB300 had not yet been signed and line-item vetoes could alter final amounts. She said the department would bring a formal FY2026 approval request to the commission on Monday and that staff remained available to answer questions about the operating materials.

Ending

Commissioners thanked staff for the overview and asked for additional detail to accompany the formal approval packet, including clearer breakdowns of program IDs, the sourcing of special-fund adjustments and an outreach plan for filling critical vacancies.