Hawaii Has Budget Contingency Fund, But Where’s The Task Force?
Five weeks ago politicians painted a picture of impending doom when the automatic federal budget cuts hit Hawaii鈥檚 shores.
Canceled flights, unsafe food and lost teacher funding were forecast as part of sequestration鈥檚 multi-million-dollar impact on the isles. That hasn鈥檛 happened yet, but officials are still bracing for the worst.
The slow flow of information from the feds has hampered preparations. State department heads are working with their federal counterparts, but even they don鈥檛 know exactly what to expect or when, officials said.
鈥淚t鈥檚 not really a fiscal cliff, but more of a slope 鈥 and that slope is happening right now,鈥 Hawaii Budget and Finance Deputy Director Luis Salaveria said Friday.
He and Kalbert Young, state budget czar, have worked the past few weeks to ensure the Legislature includes a $25 million sequestration contingency fund in the budget. It鈥檚 not enough to cover up to $45 million in direct federal grants that are at risk, but it would dampen the blow.
The House and Senate versions of the state鈥檚 $24 billion biennium budget include the requested contingency fund, according to the released last week. Salaveria said the Senate attached a proviso that would give the Budget and Finance Department discretion over how to allocate the money.
Task Force Still Being Finalized
Meantime, sequestration preparations haven鈥檛 been moving as quickly as expected on the task force front.
Gov. Neil Abercrombie called a press conference March 1, the day the automatic budget cuts went into effect, to say that Hawaii would prepare for the lost federal money by creating a sequestration impact response team.
This diverse group of public and private stakeholders was supposed to be formed by mid-March, according to the governor.
Abercrombie鈥檚 spokeswoman, Louise Kim McCoy, said last week that the governor鈥檚 executive order establishing the task force is very close to being finalized.
Part of the hold up has been rounding up all the members who will serve on it, she said. The team is expected to include representatives from the business and nonprofit worlds, state departments, the Honolulu rail project, counties and the military.
Education Funding Still at Stake
Sequestration 鈥 $85 billion in automatic budget cuts nationwide 鈥 is a result of Congress鈥 inability to agree on a budget. The federal in March identified examples of the anticipated impacts, from education and military readiness to clean air protections and nutrition assistance for seniors.
Hawaii is expected to lose $4.7 million in funding for primary and secondary education this year, putting some 60 teacher and aide jobs at risk, the office said. And the state will lose several million dollars more through other federal education funding sources.
Hawaii Department of Education spokeswoman Donalyn Dela Cruz said Friday that sequestration could affect the DOE in the next school year.
鈥淲e have been assessing a number of budgeting components including the state legislative actions to plan for potential long-term effects,鈥 she said.
Hawaii State Board of Education members are worried that not enough is being done to safeguard the district鈥檚 strategic initiatives from the cuts. They urged DOE officials last month to get a better handle on the issue.
Head Start is another program that鈥檚 expected to feel the impacts of sequestration. The federal OMB said Hawaii Head Start services would be eliminated for some 200 children, reducing access to critical early education.
Debbi Amaral, Head Start Association of Hawaii president, said Friday that her organization has to cut key keiki programs by 5 percent for fiscal year 2013.
鈥淓ach program director is currently working with their agency to determine the best way to implement cuts without severely impacting the quality of services for children and families,鈥 she said.
鈥淗ow each program absorbs the 5 percent cut will be up to the program director, agency administrators, Board of Directors, and Head Start Policy Council,鈥 Amaral said. 鈥淚t will definitely result in a reduction of services, however, exactly what this will look like will vary from program to program.鈥
The state Department of Health does not anticipate being affected by sequestration until October, DOH spokeswoman Janice Okubo said.
Federal budget reductions affecting the DOH in the fall may involve the Women Infants and Children Services program, but she said these impacts will be minimized by adjustments in food purchasing and prioritization.
The department may need some of the $25 million contingency fund to cushion the blow from the federal cuts, Okubo said.
“The DOH is working with the governor鈥檚 office to identify our potential future funding needs around this issue,” she said.
An Opportunity for Some, Not a Concern to Others
Nationally, political appointees such as Defense Secretary Chuck Hagel are giving government back portions of their pay in a with the employees in their departments who are facing up to 14 furlough days.
There has also been a growing call for the Pentagon to use the sequestration as a means to combat the internal drivers of military spending, as Wednesday.
But the mandatory federal budget cuts aren鈥檛 a huge concern for everyone.
The state Council on Revenues, which upped Hawaii鈥檚 fiscal forecast several percent last month, said the growing strength of the economy appears to of sequestration.
