Panel expects stateThe state's Council on Revenues was expected to revise downward today by tens of millions of dollars what Hawaii can expect in tax income this year and over the next several years.
revenues to fall in future
The drop in state tax income could
be tens of millions of dollars
Gov. Ben Cayetano asked the panel of economists to move up their regular December meeting by one month because of the sudden economic downturn that followed the terrorist attacks on the mainland.
He needs new figures to put together the administration's supplemental budget proposal to the Legislature and to determine the size of spending cuts needed.
The seven-member council had forecast a 4.1 percent increase in revenues this fiscal year over last year followed by a little more than 5 percent growth annually for several years.
Council Vice Chairman Paul Brewbaker said earlier this month that a cut of two or three percentage points for this year would be in the ballpark.
The council's last revenue forecast came six days before the Sept. 11 attacks that saw Hawaii's tourist traffic drop by more than 25 percent, led by a more than 50 percent drop on Japanese visitors.
The council recently adjusted its forecast of personal income growth in Hawaii to 3.5 percent this year and 2 percent next year from 5.5 percent both years. That represents a $2.6 billion loss in income over the two years.
The personal income growth figure is a key factor in projecting state tax revenue growth.
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