Council firm on projected tax revenues
Hawaii's economy will continue growing at the same pace as predicted a month ago, according to the state Council on Revenues.
In a preliminary report last month, the council, which projects the state's tax revenues, reduced its projected growth of tax revenues for the 2009 fiscal year to 1 percent from 2 percent.
At a meeting yesterday, the council voted to keep its projection for 2009 the same.
Gov. Linda Lingle said in a statement that she was pleased the council did not change its revenue outlook.
Lingle said she has been looking for ways to keep the highest level of public service with reduced funds "without increasing taxes or fees."
Lingle has already reduced discretionary spending for all state departments by 4 percent.
She is planning "additional spending restrictions," including the deferral of spending cash for construction projects by the Department of Education and the University of Hawaii.
She also will restrict spending for new programs in legislative acts outside the operating budget, she said. She did not say how much spending she will cut.
Lingle said bond-funded state construction projects will go forward, pumping energy into the construction industry with projects such as a $2.3 billion airports modernization plan.
The small revenue growth rate reflects the shrinking economy, said council Chairman Paul Brewbaker. He predicts declining rates for jobs, personal income, visitor arrivals and construction in 2008.
Adjusted for inflation, currently 4.9 percent, the growth of the economy is actually negative, he said.
But the economy will become stronger as inflation declines and revenue grows to a projected 4 percent in fiscal year 2010, he said.
Brewbaker said he is surprised there are not more job losses because of the shrinking economy - such as after the Gulf War and the Sept. 11, 2001, terrorist attacks.
He said during the good economic times, managers have not hired as much because of a tight labor market and might not have as many employees to lay off.