Hawaii, Like Alaska, Could See Huge Fiscal Impact From Loss of Congressional Seniority

Hawaii’s Senator Daniel Inouye brought billions of dollars in federal funding to his home state during the nearly 50 years he served in Congress.

The 88-year-old World War II Medal of Honor winner was one of the most powerful people in elected office, serving as President pro tempore and head of the Senate Appropriations Committee.

Inouye’s death on Monday has left many in Hawaii’s political and business communities wondering how Hawaii’s economy will fare now that the man fondly known as “Hawaii’s walking economy” who jokingly referred to himself as the “King” of earmarks is no longer in Congress to bring home federal dollars.

University of Hawaii Professor Panos Prevedouros, PHD said with the sudden death of U.S. Senator Inouye and the retirement this December of U.S. Senator Daniel Akaka, Hawaii is in the middle of an “unprecedented fiscal tsunami” because of the total loss of Congressional seniority.

Hawaii stands to lose as much as $450 million per year, Prevedouros said, because a large share of local programs are funded by special appropriations and earmarks would be difficult to obtain in the coming years.

Students at the University of Hawaii estimated Inouye brought between $200 million and $450 million to Hawaii each year. “The students surmised that the sudden loss of Senator Inouye would be similar to the sudden and complete loss of Hawaiian Airlines (Hawaii’s main airlines),” Prevedouros said.

To get an idea of what Hawaii might experience in the coming years, the UH graduate students examined federal funding in Alaska and the impact of the loss of its senior senator when Senator Ted Stevens lost the 2008 election.

Alaska is a nearly “identical case,” Prevedouros said, because Senator Ted Stevens was from a small state with very large dependence of federal monies, and he was a senator with great seniority and chair of Senate Appropriations Committee before he lost re-election.

“Fiscal Year 2009 federal budget was the last one that Senator Stevens of Alaska was present. In 2008, Alaska was represented by Senator Stevens and a junior senator. Stevens alone appropriated $235 Billion in earmarks. Jointly the two senators from Alaska appropriated $496 Billion,” Prevedouros said.

“In a case identical to Hawaii in 2012, both Alaska’s senators were replaced in the 2008 elections with two very junior senators. These two ‘newbies’ were able to appropriate only $46 million in solo earmarks and $174 million in joint earmarks in FY 2010,” Prevedouros added.

The difference for Alaska between 2009 and 2010 was dramatic.

“Solo and joint earmarks declined by 80% and 65%, respectively. In actual dollars, solo earmarks declined by $189 million, and joint earmarks declined by $322 million,” Prevedouros said.

There was a similar analysis in 2010 at California’s Claremont McKenna College produced by seniors, which examined the federal funding Alaska and Hawaii received via their Senators.

Like the UH study, the Claremont study, showed:

• The loss of Senate Seniority will not completely sink Hawaii and Alaska’s economy, but it will definitely have a big impact.
• Federal spending is obviously a huge reason why states like Hawaii and Alaska are able to thrive. In Alaska from 1982 to 2005, Expenditure per dollar Tax increased by 280% from $4977 to $13950 in large part due to Stevens and his chairmanship to the Appropriations Committee in 1998. Steven’s seniority was extremely important for Alaska.
• A similar situation occurred in 1997 when Oregon lost 30 years of Senate experience and two periods of Appropriations Committee chairmanship with the retirement of Mark Hatfield.
• States that lose senior representatives like Hatfield and Stevens are losing years of institutional knowledge. Senior Senators understand the system; they know who to call, they know how to get things done quickly, and they know exactly what they need.
• Ted Stevens, the longest serving Republican Senator in US History from Alaska, lost his seventh re-election bid in 2008. The loss left Alaska with Republican Lisa Murkowski to replace Stevens as their Senior Senator. In the 2009 Alaska primary elections, Murkowski illustrated the importance of Seniority to voters. Unfortunately for Murkowski, the state that had received billions in federal dollars largely in part to Stevens, did not agree, and voted fellow Republican Joe Miller to take her place. Steve Haycox, a University of Alaska Anchorage history professor, said in article, “On the face of it, it puts Alaska in a desperate economic situation because it will have two junior senators…That’s a big, big problem when one-third of our economic base is federal spending.
•This is the exact situation that people in Hawaii are anxiously awaiting when Senator Daniel Inouye eventually loses his seat in the Senate. Nearly fifty years of experience in the Senate simply cannot be replaced. How much will states like Hawaii and Alaska suffer with the loss of their Senior Senator?

Another indication comes from proposed cuts due to the “Fiscal Cliff.”

Taxpayers for Common Sense list for Sequestration Cuts prepared in October of 2012. The list details $2 trillion dollars in cuts to avoid the fiscal cliff. Hawaii is nowhere in the document, but Alaska is part of at least four major cuts. Of these proposed cuts, Prevedouros notes $8 billion are direct for Alaska projects and another $23 billion are for projects that involve a handful of states including Alaska.

References:

https://www.taxpayer.net/user_uploads/file/FederalBudget/2012/TCS_Budget_Cuts_SlidingPastSequestration_October1a.pdf

Morris, Adam J., “The Effects On a State When They Lose Their Senior Senator” (2010). CMC Senior Theses. Paper 41. https://scholarship.claremont.edu/cmc_theses/41, Claremont McKenna College, California.

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