As the 2025 state legislative session enters its final weeks, the University of
Hawaii is closely watching ongoing conference committee negotiations that will determine how much state support the university will receive in the coming fiscal biennium.

With the session scheduled to adjourn May 2, lawmakers from the House and Senate are now tasked with reconciling their budget bills — and the implications for the university system are significant. The disparities between the House and Senate versions, particularly in general fund support for UH’s operating needs and long-term financial obligations, are stark.

Kalbert Young, UH vice president for budget and finance and chief financial officer, noted that the budget proposal recently passed by the Senate includes a more limited level of general fund support for UH in several key areas, compared to the versions put forward by the governor and the House.

One of the most pressing issues is the future of funding for the John A. Burns School of Medicine and the UH Cancer Center. While both the governor’s and House budgets include funding to help cover debt service and
operational costs for these institutions, the Senate
version does not.

This omission comes at a critical time. Young warned that federal funding for
biomedical research is expected to decline under the new federal administration, though research at JABSOM and the Cancer Center remains essential to improving health outcomes for Hawaii residents.

“First, nothing in the legislative budget request is to address any issues related to the federal supplantation of funds, so that worry has not yet been addressed,” Young said. “There will come a time when a question will be put to the university and the state about how those services and programs will continue if they are to continue without
federal funds.”

According to Young, the state originally had chosen to fund the medical school and Cancer Center in the 1990s through special revenues — primarily cigarette taxes and tobacco settlement funds — rather than general funds. But those revenue streams have been shrinking for years.

“Cigarette consumption has been waning each year over year,” Young explained. “The amount of the master settlement agreement that comes to the university to pay for the debt service at the medical school was already short this year, and it is forecast to be even farther off this coming year and
every year until the finishing of the debt.”

He added that the Cancer Center’s funding source is also projected to be insufficient starting next year.

Despite the shortfall, Young stated that the university will not default on its debt. He indicated that tuition revenues could be affected as a result, adding that it is likely tuition revenues will be used to address the gap.

The broader concern looming over UH is the predicted reduction in federal biomedical research funding. While the current budget debate focuses on capital and operational expenses, the larger issue is whether the university can sustain its research capacity without federal backing.

“Some (research) is on the radar from the current administration that may get curtailed or canceled,” Young said. “That’s probably more into the next fiscal year and beyond … That will be a bigger question, bigger than the debt service.”

The Senate’s proposal to allocate $252.9 million for UH capital improvement projects includes $120 million for student and faculty housing at Kauai Community College. However, Young said this support
is misaligned with the
university’s actual capital priorities.

Young said that the proposal “disproportionately
ignores” the university’s specific request for capital funding support for existing student housing.

For UH Manoa, the Senate is proposing nearly $120 million in capital funding for student housing, with half coming from general obligation bonds. The remaining funding would need to be raised by the university through revenue bonds, which would add to its debt obligations.

“Both the House and the Senate provided 50% essentially, of what is required or what is going to be needed,” Young said. “The other 50% … UH (is) to take on debt.”

The Senate also imposed a condition requiring UH to provide financial aid for students housed in any new dormitories funded by debt, raising red flags about the long-term viability of the plan.

Young said that if the state’s approach is to withhold general funds and instead have the university take on debt, there must be a clear way to repay that debt. He noted that, if rent revenue is insufficient to cover the debt and additional payments are required to support tenants, the financial model does not balance.

The Senate budget also proposes eliminating 105.35 vacant full-time positions and 2.5 temporary positions across UH. However, Young noted that only eight of these were funded by the state.

“The rest of the positions are actually funded by the university,” he said. “So eliminating the positions does not, in and of itself, save the state money.”

Young said UH is working with the Senate Ways and Means Committee to identify which programs or services the proposed vacant positions are tied to and assess what impacts, if any, their elimination would have. He noted that it is unclear what types of positions are involved — they could be faculty, administrative, student support roles or a combination.

He referred to a similar situation in 2019, when a proposal to cut 121 faculty positions at UH Manoa and 100 systemwide vacancies was ultimately reversed
following public pushback.

Young said that because the positions targeted this year are currently vacant, “I’m not really getting too spun up about the elimination of the positions, but we have to better understand the implications.”

“The budget conference just opened about an hour or so ago for this session … There is closer alignment between the House and governor’s budget proposal than either of them to the Senate,” Young said Tuesday afternoon. “That’s a little bit different than what I’ve seen in the past.”

Conference committees — where differences are
reconciled — are largely opaque, according to Young, with the Tuesday session serving mostly as a public reporting venue.

“Most of these negotiations are occurring behind closed doors,” Young said. “There are some agreements … but there are still a lot of differences. I don’t think that there was anything reported today related to UH.

“The No. 1 objective is to maintain the University of Hawaii’s level of rigor and stature in providing tier
one academic programs
for Hawaii residents and
students,” Young said. “University of Hawaii does a lot as a university, but we also do a lot for Hawaii. So, it is a very large animal.”

With only weeks left in the session, UH administrators and supporters continue to press lawmakers to fund the institution’s priorities. Whether those efforts will succeed remains to be seen, but Young was clear about what’s at stake.

“Now is the time to watch for where efforts to support higher education programs and services in Hawaii
materialize,” Young said.