Comprehensive Impact Fee Program Review

CHALLENGE

Under Act 268 (2025), the Hawaiʻi School Facilities Authority (SFA) was directed to evaluate the equity and effectiveness of the state's School Impact Fee program and determine whether existing fee districts should be retained, revised, or dissolved. The mandate raised structural questions: are fees being collected where capacity is genuinely needed, are calculations grounded in current land values, and are the rules flexible enough to deliver capacity at the scale projected growth actually requires? The program had not undergone comprehensive review in years, and demographic trends had shifted meaningfully across the islands.

APPROACH

Working as a subconsultant to The Wilhelm Group alongside Holomua Collective, MKThink developed long-term enrollment forecasts based on statewide demographic projections, then mapped projected demand against permanent capacity at every public school in the state. The team identified complexes where new capacity investment could be justified, evaluated whether shortfalls could be addressed through redistricting before resorting to construction, and analyzed available public parcels for future school sites. In parallel, MKThink updated the technical inputs that drive the impact fee calculation: student-generation rates by complex and school level, and average acres per student across urban and rural locations.

RESULT

By 2050, statewide enrollment is projected at 123,364, less than current permanent capacity in aggregate, but with sharply uneven distribution. Ten complexes are projected to need 200 or more additional seats and warrant consideration as future impact fee districts. Critically, most projected needs fall below DOE's minimum thresholds for new schools, reframing the conversation from whether to build new schools toward whether the program's spending rules allow fees to deliver capacity through redistricting, modernization, or alternative delivery models. The review gave SFA and the legislature a defensible foundation for decisions that affect how future growth is funded.