The writing is on the wall, and even though the details won’t come into focus for a while, the basic message likely will remain: Hawaii leaders will have to change assumptions they make about federal funding.
The dollars flowing through a pipeline established in the days of the late U.S. Sen. Daniel Inouye have been tapering off for years and now will slow to a virtual trickle.
And as a result, the state must rethink how its own revenues are prioritized, and find new sources to offset the support that they’re about to lose. As the Legislature begins to refine its budgetary planning, the bills proposing to bring in new revenues ought to gain momentum, while the push to increase spending, especially long-term commitments to higher public employee salaries and benefits, should not gain any traction.
The few areas in which Hawaii, and the nation at large, would benefit through sizable spending boosts is in defense, homeland security and veterans affairs. The Department of Defense budgetary bucket will carry a 10 percent increase that seems wholly out of balance.
As crucial as military spending is to the overall economic health of this state, any benefit would be offset by deterioration in other sectors, brought by devastating cuts in social programs.
So far, the president is adhering to campaign promises to maintain the core entitlement programs of Social Security and Medicare, two of the biggest fiscal liabilities. This means most of the cutting comes from a relatively slim slice of the federal budget, the part that supports a wide array of programs, including support for education, the arts and the environment.
The worst of it clearly is the effect on those in lower income groups. The rough outlines of the spending plan — what’s called the “skinny budget” — will change as the Republican Congress works its will on the document. But it is a Republican Congress that ideologically favors reducing non-defense spending, so what finally emerges likely will bear at least some resemblance to the original plan.
The poor surely will suffer the most, if spending drops for social safety-net programs. Nationally, the projected cuts to the Meals on Wheels program serving the needy and home-bound drew an angry response from social service organizations, but there are numerous other areas in which this population will feel the pinch.
>> Housing programs that serve the poor would suffer through the elimination of Community Development Block Grants and the HOME Investment Partnerships program, overseen by the Department of Housing and Urban Development.
For the 2016 fiscal year, $12.2 million in CDBG funds came to Hawaii, along with $5.3 million in HOME funding. The concern here, according to advocates for the poor, is that the loss of these funds will further handicap efforts to finance housing projects aimed at keeping more families from falling into homelessness.
>> The Legal Aid Society of Hawaii stands to lose a quarter of its budget, which provides legal services to low-income clients, including those in abusive domestic relationships, seniors and people facing eviction, all of whom desperately need this help.
>> With anticipated deep cuts to the federal Environmental Protection Agency, the state Department of Health would risk losing funds paying for staffers who see that environmental laws, such as the Clean Water Act, are enforced. Public health should concern everyone but, again, it’s the poor who are the least protected.
The bottom line is that the state will increasingly need to look after its own, where the poor and vulnerable are concerned. Safety-net programs should be bolstered with what state resources are available. Tax policy that supports this population, such as the earned income tax credit, will merit consideration.
As for much of the rest of the budget, state officials would be wise to seek other sources of funds. Efforts to maximize revenues from online sales and from online bookings — such as the so-called “Airbnb bill,” but assuming zoning issues are reconciled — have gained impetus from the new reality.
Hawaii leaders also need to look beyond the public purse for ways of accomplishing the less urgent parts of the conventional government agenda. The East-West Center, for example, will have to rely in great measure on support from private, nongovernmental sources, plain and simple. Uncle Sam’s other current beneficiaries will have to do the same.
The point is that the “skinny budget,” while lacking detail, sends a clear, ringing signal about what the Trump administration values and the philosophy of a GOP Congress that largely supports it. Whether or not that meshes with traditional Hawaii values, that signal is likely to reverberate for some time, and state and county governments will need to get their own priorities in order.