Panel underestimatesBy Bruce Dunford
growth in tax revenues
State administrators and lawmakers putting together Hawaii's supplemental budget have about $15 million more to spend.
The state Council on Revenues on Thursday revised slightly upwards its estimated growth in tax revenues for the fiscal year beginning next June 30.
The panel of economists pointed to increases in the overall economy, visitor spending, construction activity and personal income in predicting revenues will grow 2.9 percent, or $87 million, from last year.
In September, the council had forecast 2.4 percent growth, or $72 million.
Each percentage point in growth is worth about $30 million. Since the new figure is a half-percent increase, it amounts to $15 million more.
The council, however, didn't change its prior forecast that revenues in the current fiscal year will be down 1.1 percent, or $33 million, from last year. That decline is attributed to personal income tax rate cuts approved last year.
However, revenues through the first five months of the fiscal year are running 1.7 percent ahead of the same period last year, the state Department of Taxation said.
The tax take in November was up 12.7 percent, or about $28 million, over November 1998, led by a 9.4 percent, or about $12 million, jump in general excise and use taxes, which represent more than half of total general fund tax revenues and reflect the state's business activity.
Pearl Iboshi, the state's economist and a member of the council, told her colleagues that preliminary figures indicate strong tourism figures in November with an end to the decline in eastbound visitors from Asia.
But council member Paul Brewbaker of the Bank of Hawaii said the November gains likely will be offset by a slump in December tourism, thanks to Y2K concerns that are curbing travel and higher holiday rates posted by overoptimistic hotel and resort managers.
The state administration and lawmakers are required by law to consider the council's official revenue forecast in determining the size of the state's budget.
The Legislature last May approved a $12 billion, two-year budget which was approved by Gov. Ben Cayetano.
When the 2000 session convenes Jan. 19, lawmakers will consider supplements and changes to that budget.
State Director of Finance Neal Miyahira said he will submit the administration's proposed supplemental budget to the Legislature on Monday, which is the deadline set by state law.