Abercrombie says Compacts are a federal relationship that should be federally supported

September 05, 2011

By Bill Jaynes
The Kaselehlie Press

Federated States of Micronesia -"We are all in the same canoe, and we all have to paddle in the same direction," wrote Neil Abercrombie, Governor of the State of Hawaii. It was the last line in a letter to Nikolao Pula, the Director of the US Office of Insular Affairs regarding the heavy financial burden that Hawaii is bearing to host immigrants from Pacific Island nations that have Compacts of Free Association (COFA) with the United States government.

Hawaii's population is nearly 1.4 million people, all relying on a canoe that seems to have sprung great gaping leaks. The State is desperately bailing and trying to patch those holes before the whole thing goes down.

On June 23 Governor Abercrombie signed Hawaii's $21.9 billion budget for the next two years. News sources say that Hawaii's current accumulated debt is in excess of $21 billion. The Hawaii Legislature says that the governor needs to cut at least $50 million in spending in each of the next two years. Governor Abercrombie, while speaking to Hawaii Legislators about the fiscal crisis called it an "undeniable storm" of fiscal challenges that could upend the state's economic foundation. He instructed state department directors to identify low-priority programs for possible elimination and take other cost-cutting measures.

Governor Abercrombie told US-OIA that Hawaii spent nearly $115 million last year. He supported the claim with 50 pages of detailed exhibits from many Hawaii State Government departments. As long as it has been possible to do so, citizens of three Pacific island nations have exercised their rights under Compacts of Free Association with the United States Government. The Republic of Palau, the Republic of the Marshall Islands (RMI), and the Federated States of Micronesia (FSM) each have separate COFA agreements with the United States that allows citizens from those countries to freely migrate to the U.S. for purposes of work, or study.

Governor Abercrombie's letter said that the 2003 census estimated that there were 7,297 COFA residents in Hawaii. In 2008 the Census Bureau estimated the number of COFA residents in Hawaii to be 12,215. "The enumeration estimates in both 2003 and 2008 are widely considered to be under-representative of the actual numbers of COFA migrants residing in the State," he wrote.

The 2008 Compact Impact cost reported by Hawaii to US-OIA was $100,963,808; up from $32 million reported in 2002.

"Because the unique relationship under the Compacts is one created by federal mandate, and the State has limited funds and capacity to provide services, I believe there must be a concerted effort by the Department of the Interior and Congress to directly address the issues and assist Hawaii and the other states and territories," Governor Abercrombie wrote.

Earlier letters written by high ranking and influential members of the U.S. Congress essentially mandated that the COFA nations control their out-migrating citizens. Abercrombie's letter, however recommended a team approach to the problem. "It is essential to include representatives from the State and the other affected jurisdictions, as well as the COFA nations, in a cooperative effort to develop those resources for our mutual benefit. Including the people who are directly affected and who have the most invested in the outcomes will lead to effective and creative solutions that help us achieve our goal of providing for the needs of all of our citizens and our COFA neighbors."

Certainly Abercrombie's approach to the problem is different from that of Governor Linda Lingle's administration which attempted to essentially write COFA nation citizens out of Hawaii's QUEST health care system entirely, an attempt that went down in flames.

Abercrombie's report never pointed out as did the letter Hawaii's Senator Daniel Inouye wrote to all of the COFA Heads of State in late July, that Hawaii receives only $10 million in Compact Impact funds from the federal government. It didn't need to. Pula is aware of how much the State receives. Abercrombie also did not point fingers at the COFA migrant population as others have done. He did say that the numbers "suggest that the COFA migrants are utilizing services at a rate that is higher than that of the general population."

An attached exhibit said that the total number of COFA residents in Hawaii is just slightly more than one percent of the total population. In 2010, COFA residents utilized 42.36 percent of the budget for Employment Core Services for Low-Income Persons, Employment Core Services for Immigrants, and the Employment Creation Services for Low- Income Persons, Immigrants and Refugees programs. In 2009 COFA residents were the beneficiaries of 56.44 percent of the budgets for those programs.

In 2009, 603 beneficiaries of the programs were from Chuuk, the most populous State in the FSM. Five were from Yap. 31 were from Pohnpei. 13 were from Kosrae. RMI, whose population is bigger than Chuuk's by more than 6,000 people, had 85 beneficiaries that year. Palau whose population is three times the size of Kosrae, had one participant in the program.

In 2009, Chuuk's beneficiaries of the programs fell to nearly half of the previous year to 360. Pohnpei rose by four to 35. Kosrae's beneficiaries increased to 17. RMI beneficiaries increased to 111. Palau's beneficiaries of the employment programs increased from one to 24.

By far, the highest figure in Governor Abercrombie's report was for the Department of Education which said that it spent nearly $56 million in 2010 to school 5,508 COFA resident students at a cost of $10,001.57 per student; money that the exhibits say came from the State and not from the federal government. The Department said it spent over $57 million in 2009 to school 5,085 COFA students. It said the DOE spent nearly $49 million to school 4,622 students in 2008.

The report did not say how the Department of Education covers the cost of schooling non-COFA students in Hawaii.

The second highest figure in Governor Abercrombie's report was for the Department of Human Services (DHS) at over $52 million for 2010, slightly more in 2009, and $43.78 million in 2008.

Of the DHS expenditures the Hawaii QUEST program has incurred the greatest cost for COFA residents of any DHS program in any given year. Hawaii QUEST "is a program that provides health coverage through managed care plans for eligible lower income Hawaii residents," the DHS website said. It also said that only 125,000 people can be enrolled in the program at any one time. When Hawaii QUEST enrollment is no more than 120,000 on December 31 of any calendar year, an open application period will be conducted in the following calendar year, the website says. Certain exceptions for certain categories of applicants are made for particularly low income residents.

9,965 COFA residents in Hawaii accessed QUEST in 2010 for a total cost of over $29 million. Combined with the "Medicaid Fee for Service" program (FFS), which was accessed by 2,670 COFA residents of Hawaii, the total cost for low-income health service paid for by DHS was nearly $33 million.

Shelter and outreach programs for COFA residents in Hawaii cost the State $3.45 million and were accessed by 2,312 COFA citizens in 2010.

1320 "Ward Days" were spent by COFA young people in the Hawaii Youth Correctional Facility at a cost of $345,249 in 2010.

A total of 3,795 COFA residents were recipients of Hawaii's Aid to the Aged, Blind, and Disabled (ABD), Temporary Assistance to Other Needy Families (TAONF), and General Assistance programs at a cost of $8.88 million.

Work program contracts were provided to COFA residents at a cost of $5.2 million.

Hawaii's Department of Health reported nearly $4 million in expenses in outreach, education and direct health care of COFA residents "most notably related to tuberculosis, Hansen's disease (leprosy) and other communicable diseases, which are over-represented within COFA populations," Governor Abercrombie wrote.

Governor Abercrombie's letter included lost income of nearly $1.4 million in 2010 for 282 COFA students that would have gone to the University of Hawaii if the University had charged non-resident tuition fees to COFA migrants. "COFA migrant students historically have been allowed to pay resident tuition rather than non-resident tuition, which many would find prohibitively expensive," Governor Abercrombie said in his letter to Director Pula.

"Simply put, the State of Hawaii cannot continue to absorb these costs which can only become greater in impact on our tax payers. We cannot continue to slash programs and people in order to uphold a federally imposed mandate. I would request that the Department of the Interior review the funding of the Compact Impact assistance and make every effort to work with Congress to increase the amount of direct assistance to the State to offset the costs incurred as a direct result of increased [COFA] migration," Abercrombie wrote.

Governor Abercrombie's report did not mention any offsetting State tax revenues collected from COFA residents. Even if his report had done so the impact of those tax receipts would likely have been small compared to the State's reported expenditures for COFA residents. At reported COFA population levels each and every COFA resident, every man woman and child, would need to have paid the State $8,265.56 in 2010 taxes in order to offset the nearly $115 million the State says it spent that year; something that clearly did not happen.