Hawaii high on federal
spending list

By Pete Pichaske
Phillips News Service

WASHINGTON - Hawaii remains a national leader in defense spending and overall federal spending, according to figures released today.

The Census Bureau's annual report on federal spending by state found that the Defense Department in 1998 spent $2,845 per capita in Hawaii. That was more than three times the national average of $838 and higher than every state except Virginia, home of the Pentagon.

The generous defense spending in the isles, a result of the huge military presence, helped boost overall federal spending in Hawaii to $7,076 per person, the fifth-highest total in the nation.

Asked if military wages were driving federal spending in Hawaii, Census Bureau analyst Carl Lundgren said: "That would seem to be a fair statement."

While this year's figures were computed differently, Hawaii's status as a leading recipient of federal money was unchanged from previous years: The state has ranked fifth in per capita spending in every Census Bureau report since 1991.

Moreover, a similar study last year by the Northeast-Midwest Institute, a Washington-based research group, also ranked Hawaii fifth in per capita federal spending.

Local economists have long recognized the importance of federal spending to the Hawaii economy, especially as tourism falters.

Paul Brewbaker, chief economist for the Bank of Hawaii, called the military wages "a direct injection" into Hawaii's economy. And the spending habits of military personnel, he said, tend to benefit local businesses and other residents more so than some tourist spending, which is often spent on costly, imported goods.

Brewbaker attributed the continued high level of military spending in the isles to Hawaii's strategic location.

"We really do represent a forward presence," he said.

The study covers almost all domestic spending by the government. The main exception is interest on the federal debt.

The top four states in per capita spending were, in order, Virginia, Maryland, Alaska and New Mexico.

While total federal spending in Hawaii - $8.4 billion - was high for a small state, the figure was dwarfed by other states. California led the nation in federal funds with $162 billion, followed by New York ($100 billion), Texas ($92 billion) and Florida ($84 billion).

While the federal government spent more money per person on salaries in Hawaii than any other state, two non-states outpaced the isles: the District of Columbia, where the federal government is the leading industry, and the Pacific island of Guam.