Hawaii’s hurricane fund in jeopardy of being drained

Hurricane InsuranceHawaii may lose their state hurricane fund in an attempt to balance a 232 million dollar deficit. The fiscal year ends in three months and state officials are scrambling to find a way to balance the budget.  One approach that is being considered is to use part of, or all, of the 117 million dollars sitting in the hurricane relief fund.

The state fund was started after the 1992 disaster from hurricane Iniki, which caused most insurers to stop writing policy coverage for hurricanes and related damage.  It took 10 years for insurers to start writing hurricane policies again in Hawaii.

At that time, the hurricane fund went inactive; being kept as “risk insurance” against another disaster large enough to cause insurance companies to pull out again. If another massive hurricane event was to occur, and insurers withdrew coverage; without the emergency funds, residents and businesses would be vulnerable to absolutely no help, and no protection. 

Neil Abercrombie, Hawaii’s Governor, has also submitted other proposals, which seem drastic to some, to try to get the state’s budget back on track to avoid the impending doom of a deficit reaching over one billion dollars in the next two years.

Some of the proposed measures Abercrombie submitted were enacting a ten cent tax on soda and similar drinks that are in containers less than 12 ounces, and a .25 cent tax on containers larger than 12 ounces; raising taxes by 50 percent on alcoholic beverages, and repealing the deduction for state taxes allowed to people who itemize on their tax returns.

This is a small listing of well over 15 other proposals that Gov. Abercrombie has submitted for review. Unfortunately, dipping into the states hurricane fund is looking like the only short-term solution they have available for immediate access to beat the fiscal yearend deadline.

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