The loss of Sen. Daniel Inouye as Hawaii’s main benefactor in Congress will hurt the state’s effort to attract federal dollars that are a significant part of the local economy.
In addition to helping funnel billions of dollars into Hawaii through earmarks, Inouye was able to use his senority and influence in Washington to pull strings that kept a small state like Hawaii from suffering the full force of federal budget-cutting efforts, according to analysts.
"There was no one more well respected than Sen. Inouye. It’s important to remember that he brought Hawaii a stature that it will probably have difficulty sustaining," said Paul Brewbaker of TZ Economics.
A senator since 1963, Inouye in 2009 became chairman of the Senate Appropriations Committee, where he continued a long record of helping fund projects in Hawaii.
Inouye ranked second among senators for the amount of federal earmarks — funds for special projects — that he sponsored. Inouye sponsored $392.4 million in earmarks in fiscal year 2010, according to OpenSecrets.org. In comparison, the senator with the fewest earmarks was Minnesota Democrat Al Franken, whose total was $8.6 million.
The Almanac of American Politics estimated that from 1998 to 2003 Inouye steered $1.4 billion to military projects in Hawaii. In addition, Hawaii ranked third on the list of states with the highest per-capita federal government spending at $19,001 in fiscal year 2009, behind only Alaska at $20,351 and Virginia at $19,734, according to the U.S. Census Bureau.
However, Inouye’s influence on the Hawaii economy goes beyond earmarks and military spending, said Hawaii Pacific University economics professor Leroy Laney. He cited Inouye’s work to get a fleet of NCL America cruise ships based in Hawaii and his efforts to get the U.S. Commerce Department’s Economic Development Administration to fund programs here, such as the Kauai Technology Center.
"His impact transcends military spending with projects too numerous to mention," Laney said. "He knows people in the Department of Transportation, the Commerce Department and the Pentagon. He knows who to call. Over the years he’s brought in a lot of money that has stimulated the economy," Laney said.
"You just can’t replace that kind of senority in the Senate," Laney added. "That’s the way the Senate works. You stay in that long to get into a position of senority and you’re able to bring a lot of money into your home state — and he certainly does."
Mattie Yoshioka, president of the Kauai Economic Development Board, credited Inouye with helping prevent the closure of the Pacific Missile Range Facility at Barking Sands during various rounds of military base closures. The missile range employs about 800 people, 90 percent of whom are civilians, she said.
"He managed to get it off the blacklist. That’s a big impact on our economy," Yoshioka said.
Inouye helped secure funding for construction of the $1.3 billion H-3 freeway, connecting Pearl Harbor and Marine Corps Base Hawaii in Kaneohe. Most recently he successfully lobbied for the federal government to commit $1.5 billion toward the building of a new commuter rail line in Honolulu.
"Dan Inouye spent his career building an enduring federal presence in Hawaii to ensure that the state would receive its fair share of federal resources," his office said in the statement announcing his death. "He worked to expand the military’s presence on all major islands, stabilizing Pearl Harbor, building up the Pacific Missile Range and constructing a headquarters for the United States Pacific Command.
"He has worked to build critical roads, expanded bus services statewide and secured the federal funds for the Honolulu Rail Transit project," the statement said.
He brought in money for education as well.
Inouye was key to funding of the East-West Center with its 21-acre campus adjacent to the University of Hawaii. The center reported net assets of $37.5 million in 2011.
"Thanks in large part to the Senator, the Center has a strong set of programs that serve an important function in U.S.-Asia-Pacific relations and understanding," said Charles Morrison, president of the center, in a statement.
Inouye exemplified how a senator’s seniority could keep a relatively small state like Hawaii from being marginalized in the legislative process, said Brewbaker of TZ Economics.
"That’s important because Hawaii’s ongoing challenge is with maintaining ‘street cred’ from an economic and business standpoint. No sooner than you achieve some credibility, it evaporates. Having someone of Sen. Inouye’s status helps with that ongoing battle," Brewbaker said.
One of Inouye’s greatest achievement for Hawaii’s economy was keeping military funding flowing into the state as defense budgets were shrinking, Brewbaker said. Inouye’s efforts to privatize military housing starting in the 1990s helped pump private capital into the economy, and later during the 2008-2009 recession helped blunt the decline in overall housing construction, he said.
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