State ranks second Helped by an increase in consumer spending, state tax collections increased in 2000 despite a cut in personal income taxes, a U.S. Census Bureau survey shows.
in per-capita budget
A census report says tax
collections rose here in 2000
thanks to consumer spendingBy Craig Gima
cgima@starbulletin.com"2000 was a very good year, and we haven't had as good a year since," said Leroy Laney, a professor of economics and finance at Hawaii Pacific University.
State spending, including spending on construction, also increased to $6.6 billion in 2000 or $5,449.35 per person vs. $6.26 billion or $5,285.32 per person in 1999.
The annual survey shows the state government collected more than $6.9 billion in revenue in 2000, a 4 percent increase over the $6.6 billion collected in 1999. That works out to an average of $5,726.60 per person in 2000 vs. $5,606 in 1999.
About $3.3 billion of that or $2,751.44 per capita came from sales, income and other taxes -- an increase from the $3.17 billion in taxes collected in 1999.
The increase in tax revenue came despite a decrease in individual income tax collections in 1999 and 2000 as personal income tax rates decreased to 8.75 percent in 2000 from 10 percent in 1998.
In 1998, more than $1.083 billion in state revenue or $908.12 per capita came from individual income taxes. In 2000 the state collected $1.064 billion or an average of $878.15 per person in individual income taxes.
Overall, Hawaii ranks second in the nation in state spending per capita and eighth in the nation in per-capita revenue. But experts caution that it is difficult to make direct comparisons between state governments.
"We're a unique state," said Neal Miyahira, the head of the state Department of Budget & Finance. "It's not apples to apples."
Miyahira points out that the state handles all education and welfare spending, while in other states some of those functions are handled by county or city governments.
Laney says taxpayers have expected a lot in the past from state government.
"We traditionally have not had the distrust of government here that some other places do," he said.
He also said smaller states cannot spread out the cost of state government over as many people as larger states.
Lowell Kalapa of the Tax Foundation of Hawaii says he's concerned about the gap between where Hawaii ranks in spending and revenue collection.
Most states rank about the same in spending and revenue and there is a widening gap between being number two in spending and number eight in revenue, he said.
"Spending is way out of line with respect to revenues," Kalapa said.
Kalapa said he noticed a number of trends in spending, including an increase in per-capita spending on governmental administration to $260.96 per person in 2000 from $244.45 in 1999.
The Legislature approved pay raises for public worker union members in 1999 and that may have been a factor in the increase.
Per-capita education spending, the largest state cost, also increased to $1,529.54 in 2000 from $1,499.96 in 1999.
The full census report is available online at http://www.census.gov/govs/state/ 00st12hi.html.
State of Hawaii
