25 May 2026

Hawaiʻi has the rainy day fund, finally.

Hawaiʻi’s rainy day fund crossed the GFOA-recommended floor of 10% in 2024, reaching 14.1%. It held at 14.5% in 2025, putting Hawaiʻi above the national median for the first time in NASBO’s 26-year record.

A strong fund means the state can keep services running through recessions and disasters without emergency cuts.

For 18 of those 26 years, the fund sat below 2%. In 2020, it was drained to 0.7% to help deal with COVID.

But Hawaiʻi built the fund by vote, not by rule.

The state has two deposit rules on paper, but both have escape hatches. The constitution requires the legislature to act on a surplus, but that action can be a tax refund or debt prepayment, not necessarily a rainy day fund deposit. The statute is even narrower: it deposits 5% of the balance only when revenue growth exceeds 5% for two straight years. It has never actually triggered.

So every recent buildup has depended on a vote. The legislature put $500 million into the fund in 2023 and added $50 million more through 2026’s SB2600.

The Maui wildfire settlement commits $807.5 million from state coffers over FY2026 and FY2027.

Hawaiʻi has built its financial reserve, but the buildup is fragile: a vote can drain it.

Fifteen states tie deposits to revenue growth automatically, a pattern Pew identifies as best practice. Hawaiʻi has no such rule yet.