Team Formed to Address Sequestration Impacts in Hawaii

Gov. Neil Abercrombie today announced he is assembling a “Sequestration Impact Response Team” to help the state deal with its share of looming federal budget cuts.

He said the team will include representatives from government, nonprofit organizations, business leaders and the military.

According to the Office of Management and Budget, the $85 billion sequestration will cut about 8% from defense programs and 5% from non-defense programs over the next seven months.

The across-the-board cuts which take effect at midnight is the product of the Budget Control Act of 2011.

Abercrombie said the response team will work to mitigate the impact of the cuts throughout Hawaii.

According to the OMB, one impact will be $4.7 million less federal funding for Hawaii’s schools, putting the jobs of 60 teachers and their aides at risk.

It will also mean the loss of $2 million in funding for 20 teachers, aides and staff who help children with disabilities, and the elimination of Head Start and Early Head Start services for approximately 200 children.

The governor said the budget he submitted in December for the 2013-2015 fiscal years contained $25 million per year in contingency money aimed at easing the impact of the sequestration.

However, state Finance Director Kalbert Young said the sequestration appears to jeopardize up to $45 million per year in direct federal grants.

Over the next week, state departments will be using information from federal officials on the programs and grants that will be cut as they work to reduce their impacts, Abercrombie said.

The cuts are also expected to impact most or all of the more than 19,000 Department of Defense civilian employees in Hawaii, which is expected to have a rippling effect in the state’s economy.

“We understand that the DOD will be issuing letters later this month to notify those who are going to be furloughed,” Abercrombie said in a statement issued today. “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,” he said. “This is a time when we need to show and practice aloha to those directly affected by these nationwide cuts.”