Hawaii sixth in federal spending


POSTED: Thursday, July 23, 2009

Hawaii ranks sixth among states in per capita federal spending, largely because of military spending and salaries, according to a U.S. Census Bureau report released today.

Federal government spending topped $15 billion in Hawaii last year, which works out to $11,651 for every man, woman and child here. Of that amount, $6.1 billion, or $4,741 per each Hawaii resident, is related to Defense Department spending.

The $15 billion is up about 6.7 percent from the $14 billion spent in 2007. Nationally, federal domestic spending rose 9.3 percent last year to about $2.8 trillion.

“;Federal spending is very important for Hawaii's economy,”; said Eugene Tian, the research and statistics officer at the state Department of Business, Economic Development and Tourism.

Federal spending accounts for 13.5 percent of Hawaii's gross domestic product, Tian said, the third-largest sector after real estate and tourism. State and local government spending, which was about 9.2 percent of Hawaii's GDP, was fourth.

Tian said the federal government is the second-largest job generator and the top household income generator in Hawaii, mainly because federal wages and benefits are much better than the tourism industry, which provides the most jobs in the state.

Oahu has four major military bases—Pearl Harbor, Hickam Air Force Base, Marine Corps Base Hawaii and Schofield Barracks—along with the Pacific Command and Marine Forces Pacific headquarters at Camp Smith, Tripler Army Medical Center and other bases and posts.

The Defense Department spent about $2.2 billion on contracts to provide goods and services for the military last year and an additional $3.5 billion on salaries and wages for active-duty and civilian workers and retirees. All other federal agencies accounted for $234 million in procurement contracts and $630 million in salaries and wages.

The largest percentage increase in federal spending came in the “;other direct payments”; category, which includes Medicare benefits, unemployment compensation, food stamp payments and housing assistance. It grew 18.4 percent to $1.8 billion, while salaries and wages increased 14.2 percent.

The majority of federal spending—$10 billion last year—was spent in Honolulu. The Big Island got the second-highest amount, about $1 billion.

The federal government spent $659 million on Maui, $477 million on Kauai and $3.3 million at Kalaupapa on Molokai. Another $2.6 billion went to federal spending not concentrated on any one island.

Virginia ranked No. 1 in per capita federal spending with $15,256 per person, followed by Maryland, $13,829; Alaska, $13,730; Kentucky, $12,242; and New Mexico, $12,017.

States that had the lowest per capita federal spending were Utah at $6,255; Nevada, $6,638; and Wisconsin, $7,132.

The national average for per capita federal spending was $9,042 per person.