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Abercrombie wants $25 million fund to deal with federal cuts

By Star-Advertiser & Associated Press

LAST UPDATED: 4:52 p.m. HST, Mar 1, 2013

Gov. Neil Abercrombie said today he will put together at a task force to weigh the affects of federal budget cuts on Hawaii, and he wants the Legislature to approve a $25 million contingency fund to help lessen the blow from sequestration.

The Sequestration Impact Response Team will include both public and private interests.

The Abercrombie administration had already asked state lawmakers to set aside $25 million over the next two years to respond to potential federal spending cuts. Sequestration refers to the automatic restriction of federal spending that kicks in today after President Barack Obama and Congress failed to come to terms on how to deal with the federal deficit.

State departments should learn from the federal government over the next week the specific impacts of sequestration, according to Kalbert Young, the state's budget director.

Young said he hopes the state Council on Revenues will address sequestration when the council updates its revenue forecast on March 13.

The forecast will be used by the Legislature when drafting the state's two-year budget. The forecast had been expected to go up because tax revenues are coming in higher than anticipated. 

Young said initial estimates show state programs will lose $25 million to $35 million in funds for the next two years.

He says federal agencies have not yet contacted their state counterparts to say how much and where their departments can expect to lose funding.

Abercrombie says it’s unlikely most people will feel the effects of the automatic cuts immediately. He says the cuts will have a ripple effect, touching more people as cuts progress.

If the cuts remain in place, he said, 19,000 Department of Defense workers will face some furloughs between April and September. 

Abercrombie said he is optimistic Congress will turn about to find an agreement to stop full effects of the cuts from taking place.

White House estimates show Hawaii could lose millions in funding for the military, education and environmental protection this year. 

U.S. Rep. Tulsi Gabbard, D-Hawaii, said dozens of workers at Schofield Barracks on Oahu have already been furloughed and 70 have lost their jobs as a result of the impending cuts. If nearly 20,000 Hawaii residents are furloughed, it would reduce pay by more than $130 million in a state that relies heavily on federal funding, according to the White House estimates.

Operations at Army bases in Hawaii would lose more than $100 million and Air Force operations would lose $15 million. 

Hawaii could also lose about $4.7 million for schools, forcing the state to help 9,000 fewer students and lay off dozens of teachers. About $1.3 million for clean water and air quality is also scheduled to disappear. 

Hawaii is also expected to lose significant funding for unemployment, law enforcement, public health and social programs. That could mean fewer vaccines for children, fewer services for victims of domestic violence and fewer meals for seniors. 

The $85 billion federal spending cut is the result of a budget deal reached in 2011. President Barack Obama and Republicans agreed on the extreme cuts as a deadline to force them to come up with a budget compromise.  

But the president and Republicans have each refused to budge on whether to raise taxes.

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