The state of Hawaii's Council on Revenues has announced that they are predicting zero revenue growth for this fiscal year and a 5.5 percent growth for the 2015 fiscal year. This is significantly lower than the Council's January prediction of a 3.3 percent forecast for the 2014 fiscal year and the 7.4 percent fiscal growth for the 2015 fiscal year. In terms of dollar amounts, this prediction means $180 million less revenue for this year and approximately $300 million less than anticipated for next year. Kurt Kawafuchi, the Council on Revenues' chairman, stated, "The growth rate is starting to flatten. It's becoming a lot more modest at this point." Economists note that the state tax collections have decreased by 1.1 percent through February, mostly due to a decline in visitor spending.
This report may have significant impact on Governor Neil Abercrombie's state budget proposal, as state legislatures may be forced to make cuts to the governor's requests. Abercrombie commented that his budget and six-year financial plan remains sound and stated, "Our budget and financial plan replenishes and builds state reserves, pays down unfunded liabilities and modernizes state technology. Hawaii's economy is running at a sustainable level and contributing to the state's strong fiscal condition. The administration looks forward to working together with the Legislature to continue to build reserves and fund necessary public services and key initiatives, while ensuring our long-term fiscal stability."
However, not everyone agrees with the governor and some are much more cautious in their statements. State budget director, Kalbert Young, commented, "If the COR forecast is accurate, tax revenue collections would be flat compared to last year. However, as the council also recognized, there are a number of individual statistics in the larger universe of statewide economic data that suggests the overall state economy (and tax revenues) are at a peak level, and a decline from a peak, or, a judgment as to the ending of an economic cycle, is not yet clear."
Source: Honolulu Star Advertiser, 3-12-2014, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com
