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The Honolulu Advertiser
Posted on: Tuesday, February 2, 2010

Stimulus program aids Hawaiian Isles

By Sean Hao
Advertiser Staff Writer

A federal economic stimulus program that's expected to pump more than $1 billion into Hawai'i over several years created 3,015 jobs during the last three months of 2009.

That figure, released during the weekend, includes 2,065 jobs retained in Hawai'i's public education system via one-time grants, according to www.Recovery.gov, a federal Web site that tracks stimulus spending.

Separately , the White House Council of Economic Advisers recently released an estimate that the stimulus program created a total of 8,000 direct and indirect jobs in Hawai'i in the fourth quarter.

The job-creation figures show the stimulus program is helping Hawai'i's economy, which has been hit by a drop in visitor arrivals and declines in real estate and construction activity.

However, some said the jobs are having minimal impact on the economy.

"It's better than nothing, but it's not that much money in terms of the overall economy," said Carl Bonham, executive director of the University of Hawai'i Economic Research Organization. The spending "is just moderating the depths of the recession," he said.

Most of the jobs created and maintained were in government, with much of the benefit coming in the form of jobs saved that would have been eliminated without the money, said Mark Anderson, the state's stimulus funding coordinator.

"So far, I think it's safe to say the job creation has been mostly in retaining jobs primarily in the education area," Anderson said.

Stimulus jobs will come in waves, with government workers benefiting first , followed by the private sector as more public works projects get under way, said Dave Helfert, a spokesman for U.S. Rep. Neil Abercrombie.

"In the first year, the first impact it was going to have that would be felt would be in the jobs in government primarily by that I mean teachers, police officers, firefighters and so forth ... (people) who would have been laid off had the funding not been received," Helfert said. "They were right on the edge; without the stabilization funding it would have been disastrous for the schools.

"In the second year, I think you will start to see more of the shovel-ready, the actual construction infrastructure building," Helfert said.

Despite the federal infusion, Hawai'i continues to suffer high unemployment . There were 44,300 unemployed statewide during December. Additionally, there were 23,000 fewer jobs statewide in December compared with the prior year, according to the state Department of Labor and Industrial relations.

Overall, the American Recovery and Reinvestment Act is expected to bring about $1.4 billion into Hawai'i and create or save 15,000 jobs during the two-year period ending in 2011. Most of the money will pay for highways and bridges, transit systems, clean-water projects, public housing improvements and affordable housing.

Much of the stimulus money that's directed at job creation has yet to be spent. Through December, Hawai'i had been awarded about $1 billion in stimulus money. About $233.5 million was actually received, of which nearly $89.3 million was spent on potentially job-creating activities.

That figure excludes stimulus money spent on entitlement programs such as jobless benefits, as well as tax benefits.

The $1.4 billion in planned federal stimulus money is roughly equivalent to last year's decline in visitor spending, Bonham said. About 2,600 jobs were lost in the hotel sector statewide.

The second-largest job generator during the fourth quarter was a $13.6 million contract with Bulltrack-Watts to repave runway aprons at the Pacific Missile Range on Kaua'i. That project created 54 jobs. Another 53 jobs were created in the AmeriCorps community volunteer program.

The stimulus program overall has come under criticism for not having a greater impact on jobs and the economy nationwide. Such skepticism is understandable , but unwarranted, said Helfert.

"If your job's in jeopardy or you don't have a job, your economy stinks and that's how you measure it," he said. "It takes time for that to turn around so it's no surprise that people are skeptical. The (economy) has turned (up), but it's just beginning."