Military spending: Feds shell out, isles cash in

A new report on per-capita defense spending is another indication of Hawaii’s strategic position and hot economy at a time of ongoing financial expansion for the state and nation.

The results for per-person statewide spending for defense are far from equal across the board, the report by The Pew Charitable Trusts points out.

Hawaii received $5,865 in per-capita spending for fiscal 2015 — the most recent year for which complete data is available — and was third in line behind Washington, D.C., with $10,413 and Virginia with $7,132, according to the nonprofit.

The national average for the year that ended Sept. 30, 2015, was $1,510, while the state with the lowest per-person spending was Michigan, at $386.

It all figures into a Hawaii economy driven in large measure by tourism and the military. Visitors brought nearly $16.8 billion to the state last year, while federal spending toward the gross domestic product amounts to about $11.5 billion, according to the state.

Flights from western U.S. markets to Kauai are up an “astounding” 60 percent, according to the University of Hawaii Economic Research Organization. Flights to Kona are up 30 percent.

The Chamber of Commerce Hawaii said military expenditures — contained within federal spending — total about $8.8 billion annually.

State and county government spending, the No. 3 contributor, totaled $9.1 billion. Construction comes in at No. 4 at about $6.6 billion, according to the state Department of Business, Economic Development and Tourism.

U.S. Rep. Colleen Hanabusa, who is on the House Armed Services Committee, said nearly three-quarters, or 74 percent, of Hawaii’s per-capita defense spending represents salaries, wages and retirement benefits for nearly 17,000 Department of Defense personnel working to provide for their families.

“Another 23 percent of that figure is invested in military contracts awarded in Hawaii that directly benefit our local economy,” Hana­busa said.

Hawaii has about 64,000 defense personnel. Its strategic position in the mid-­Pacific and home to all five armed forces is reinforcing its historically important role in a new era of concern over North Korea’s nuclear weapons, a “great power” competition with China and a resurgent Russia.

A recently enacted $1.3 trillion government spending bill adds millions in funding for Hawaii and was called “the best appropriations bill by far for Hawaii” that U.S. Sen. Brian Schatz said he had seen in recent years.

The bill includes $317 million for military construction, a $119 million increase from last year, Schatz said.

Navy Region Hawaii and Naval Facilities Engineering Command Hawaii said last month they were looking to hire more than 175 people for jobs including security and firefighting positions. Pearl Harbor shipyard, the state’s largest industrial employer with about 5,200 civilian employees, is trying to replace an aging workforce.

“Tourism is booming, construction remains on a healthy plateau, and jobs are plentiful,” the UH research organization said last month.

Chief state Economist Eugene Tian said the U.S. economy has been expanding since 2009. “It’s good news because it will help sustain the growth of Hawaii’s economy,” he said.

Working against the continued growth is Hawaii’s historically low 2.1 percent unemployment rate, which is a “limiting factor” because industries may not be able to grow because of the pool of available people, Tian said.