Honolulu, Hawaii -- U.S. Rep. Neil Abercrombie today submitted the following written testimony to the U.S. Senate Committee on Appropriations hearing in Honolulu at the Hawaii State Capitol Building.

The hearing was held to review the progress the state has made spending federal stimulus dollars provided by the American Recovery and Reinvestment Act.

STATEMENT OF CONGRESSMAN NEIL ABERCROMBIE

Stimulating Hawaii’s Economy:

Impact of the American Recovery and Reinvestment Act of 2009

Senate Appropriations Committee

August 24, 2009

Chairman Inouye and the Senate Appropriations Committee, I commend you for convening this hearing to look into the State of Hawaii’s use of funds from the American Recovery and Reinvestment Act (ARRA).  As you are well aware, these funds are intended to launch an economic recovery by creating or saving millions of jobs while addressing long neglected challenges.  How Hawaii uses its funds will impact this state for many years to come and will determine how far ahead Hawaii will advance its goals of energy independence, quality education, and sound infrastructure.

With this purpose in mind, I would like to state three concerns with regard to funding from the economic recovery bill in Hawaii.

First, I am concerned that the State’s handling of the educational components of the ARRA puts in jeopardy Hawaii’s chances at future funding.  Earlier this year, the Governor outlined plans to severely cut the funds of the Hawaii Department of Education (HIDOE) and to instead use State Fiscal Stabilization Fund money to maintain the level of education funding, which would make the program’s goal to support dramatic education reform very difficult to achieve.  The state’s application to the U.S. Department of Education (ED) was very vague in its description of how the state would use the funding to achieve ARRA’s four areas of education reform:

• Adopting internationally benchmarked standards and assessments that prepare students for success in college and the workplace;
• Recruiting, developing, and retaining effective teachers and principals;
• Building data systems that measure student success and inform teachers and principals how they can improve their practices; and
• Turning around our lowest-performing schools.

This is a problem because ED’s Race to the Top Program, of which there is $4.35 billion in discretionary grants available to states, requires states to show reform to be in contention.  ED states that the Race to the Top Program,

“provides competitive grants to encourage and reward States that are creating the conditions for education innovation and reform; implementing ambitious plans in the four education reform areas described in the ARRA; and achieving significant improvement in student outcomes, including making substantial gains in student achievement, closing achievement gaps, improving high school graduation rates, and ensuring that students are prepared for success in college and careers.”

By using ARRA funds to simply maintain funding, it appears extremely unlikely that the State of Hawaii will be eligible for the Race to the Top Program.  I am concerned the state is giving away an opportunity for more federal funding and significant educational improvements in order for an easy solution to part of its budget shortfall. 

Secondly, in an August 6, 2009 letter to Governor Lingle, Chairman of the House Transportation Committee, James Oberstar, wrote that over the past five months:

“almost all States have moved forward aggressively to use the highway funds provided under the Recovery Act to create and sustain family-wage jobs, contribute to our nation’s long-term economic growth, and help the United States recover from the worst recession since the Great Depression. Regrettably, Hawaii is not among these States. Based on progress reports submitted to the Committee in July 2009, Hawaii is falling far behind other States in putting to work its Recovery Act highway formula funds. According to submissions received from all States and the District of Columbia, your State ranks 50 out of 51, based on an analysis of the percentage of Recovery Act highway formula funds put to bid, under contract, and underway. As of June 30, Hawaii had begun construction of projects totaling zero percent of the State’s funding.”

In his response to Chairman Oberstar’s letter, Hawaii Director of Transportation Brennon Morioka wrote in an August 20, 2009 letter that of the nineteen (10 state and 9 local) ARRA projects, “nine of the ten projects have been awarded, five have been issued notice-to-proceed.”  Mr. Morioka further reports that “federal funds for two out of the nine county projects have already been obligated” and the goal is to “have allocations being drawn for all projects by the end of October.”  

However, other states haven taken immediate action to revitalize their local economy, the risk of losing millions of dollars in federal funding for Hawaii remains.  So I urge Governor Lingle to aggressively take action to use highway funds provided by the ARRA. We cannot be content with the current projects in the pipelines and the speed at which our state is moving to put people in Hawaii back to work.

My third and final comment is with regard to the alternative energy funding that is being disbursed through the Department of Energy and the Department of Agriculture.  Multiple energy companies in Hawaii have brought it to my attention that projects are being awarded to companies who have previously submitted proposals to these departments, thereby blocking new proposals from consideration.  I understand this vastly increases the speed at which funds may be dispersed and put to use in the economy.  However, it has also come to my attention that awards are being made to big businesses and the oil and gas industry who are also becoming involved in alternative energy projects.  When combined, these actions have the result of limiting the involvement of small businesses who have a long history in this field or who may have innovative technology that has not yet caught the attention of bigger businesses.  I am also concerned that we may be trusting industry companies to move forward when they have a vested interest in the status quo.  A wider disbursement of funds would help ensure efforts do not become concentrated in specific companies. This funding will also help our state to continue making new inroads into alternative energy research and development and to generate additional momentum to our quest to become more energy independent. ARRA funding is certainly not the panacea for alternative energy development, but it does provide an opportunity to take another significant step in the right direction.

Again, mahalo for holding this hearing and taking the time to ensure Hawaii’s share of funding is spent as efficiently and effectively as possible.

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