State tax collections
decline 5.8 percent
in January

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By Russ Lynch
rlynch@starbulletin.com

State tax collections for January dropped 5.8 percent from a year earlier, but state officials said a lot of the fall is because of a year-end "weekend effect" in 2001 that may have created an unfair comparison.

More important may be the total collections for the first seven months of the current fiscal year, which ends June 30.

For that period, tax collections were down 0.3 percent from the year-earlier seven months, despite the tourism plunge following the Sept. 11 terrorist attacks.

"Zero point three is not bad," said Leroy Laney, an economics professor at Hawaii Pacific University, former chief economist at First Hawaiian Bank and a longtime expert on Hawaii's economy.

"If you account for inflation it's really a positive number, which is good," Laney said.

Total general fund collections for the past seven months were $1.87 billion, down only slightly from $1.88 billion in the first seven months of the previous state fiscal year, state officials said yesterday.

Last month's collections were $340.6 million, compared to $361.6 million in January 2001.

When there is a weekend effect like that at the start of 2001 it really is hard to make comparisons, Laney said. The last working day of 2000 was a Friday and many tax dollars generated on Dec. 30 and 31, 2000, were not reported until January 2001.

That boosted collections in January of last year and made it hard for January 2002 to catch up.

The tax department said that January 2002 deposits from the state's largest revenue source, general excise and use taxes, were down 12.8 percent to $145.4 million, from $166.6 million in January 2001, but the weekend rollover was the main reason.

Transient accommodations tax collections, from the hotel room tax, were down 30 percent from January 2001, at $11.9 million from a year-earlier $17 million.

Again, one reason was those taxes don't have to be reported until the last day of the month and in December 2000 that was a Sunday.

In 2001, the last day of the year was a Monday, a working day.

Another factor in the tourism tax being down was the industry's plunge after Sept. 11, the state said.

For the first seven months of the current fiscal year, however, the transient accommodations tax collection was down by much less, a 7.7 percent decline to $92.8 million from $100.5 million in 2001.