WASHINGTON — The military might be Hawaii’s second largest economy, but for years state officials have lacked a full understanding of just how far the money flows.
That all changed last year when the state labor department launched a new website, HawaiiDefenseEconomy.org, that provided contractor and subcontractor level detail about who was benefiting from U.S. investment in the islands’ military infrastructure.
And while the portal was a vast improvement on prior studies — it shows where nearly $2 billion a year in defense contracts go each year — it’s already becoming stale.
The U.S. military is a major driver of economic activity on the islands.
As it stands, the website is a snapshot in time. It contains spending data from 2008 through part of 2017.
Suzuki said she left the labor department and is now working on Gov. David Ige’s tax modernization initiative.
“We think the state should maintain the website and invest the money because it is a powerful tool.” — Kamakana Kaimuloa, Chamber of Commerce Hawaii
She said there’s no obvious home for the project, although its purpose seems to align well with the state Department of Business, Economic Development and Tourism. The University of Hawaii could also be a landing site, she said.
Understanding the breadth of the military’s impact on the economy can be difficult, and has been the subject of a handful of studies over the years.
In 2015, the Office of Economic Adjustment found the U.S. spent about $7.8 billion in Hawaii on defense. That’s second only to Virginia when it comes to defense spending as a share of the state’s economy.
Much of the money spent in Hawaii — about $5.7 billion — covered the payroll expenses of the more than 73,000 active duty, civilian and reserve personnel on the islands. The remaining money was for defense contracts.
Tourism, on the other hand, is a much larger industry. In 2017, visitors spent an estimated $17 billion in the state.
This is where military money flowed in fiscal year 2015, according to the U.S. Department of Defense Office of Economic Adjustment.
The Chamber of Commerce of Hawaii wants the HawaiiDefenseEconomy.org site to thrive.
“Hawaii was ripe for this,” said Kamakana Kaimuloa, the chamber of commerce’s vice president of business advocacy, development and military affairs.
“Obviously, from our perspective at the chamber we consider the military to be second only to the visitor industry when it comes to the economy in the state.”
The chamber was a driving force in obtaining the grant in the first place. Kamakana said it would be a shame to see that effort go to waste.
Kaimuloa said he hopes local businesses will use the website to follow the contracting trends and search for opportunities to snag a contract or connect with other companies already doing the work.
But he also worries that the Hawaii defense economy site will languish without more funding and a commitment from the state.
At this point, Kaimuloa said, there’s no state funding to maintain the site, much less the personnel to keep it updated.
“We are trying to see what we can do,” Kaimuloa said. “We think the state should maintain the website and invest the money because it is a powerful tool. We just don’t know what’s going to happen with this even though this is a fantastic product.”
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