Gov. Neil Abercrombie announced plans Friday to establish a “Sequestration Impact Response Team” to address nationwide federal spending reductions scheduled to take effect by midnight. The team will work to mitigate the impact throughout the State of Hawaii.
“I am putting together a Sequestration Impact Response Team made up of public and private stakeholders,” Gov. Abercrombie said. “The team will include representatives from government, nonprofits, the military, and business leaders, who are ready to identify how we can help our citizens and segments of our community that will be most affected.”
In December, the governor submitted the state’s 2013-2015 fiscal biennium budget with a contingency of $25 million per year, specifically for the possibility of sequestration.
“What remains uncertain is whether federal sequestration reductions will be permanent, or even extend longer than one year,” said Finance Director Kalbert Young. “Our financial plan has provisions to accommodate up to $25 million in each of the next two fiscal years. We have already identified as much as $45 million in direct federal grants to Hawaii that may be at risk.”
As the true scope of sequestration unfolds, the governor stated that the administration will roll out contingencies. Last week, the governor ordered all state departments to work with their federal counterparts to assess which areas will be impacted and estimate the amount of state funds needed to continue services and programs.
Over the next week, state departments are expected to hear from federal departments and agencies about federal funding programs and grants that will be reduced. Departments will use this information to look for ways to sustain state programs over the next year.
Gov. Abercrombie added, “We are in constant communication with the U.S. Pacific Command and aware of its plans to implement furloughs, which may affect some or all of its 19,000 Department of Defense (DOD) civilian employees in Hawaii. We understand that the DOD will be issuing letters later this month to notify those who are going to be furloughed. The lost wages during that period are estimated to be $138 million.”
“I have contacted local financial institutions to encourage them to assist federal workers in the islands who may experience financial difficulty. This is a time when we need to show and practice aloha to those directly affected by these nationwide cuts," said Gov. Abercrombie.
According to White House estimates, Hawaii could lose millions in funding for the military, education and environmental protection.
State Army base operations would lose more than $100 million and Air Force operations would lose $15 million. About 20,000 Hawaii residents who work for the Department of Defense could be furloughed.
The state is also expected to lose significant funding for unemployment, law enforcement, public health and social programs.