Tax revenue rebounds

The state's total take was up 9.9 percent
in February and up 2.8 percent
so far for the fiscal year

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By Bruce Dunford
Associated Press

The state's tax take in February of $260.1 million was up 9.9 percent over February of last year, pushing revenues up by 2.8 percent through eight months of the fiscal year.

Lawmakers and the state administration, however, believe the revenue growth in the current fiscal year will be only two-thirds of the 6.1 percent growth forecast by the state's Council on Revenues.

The panel of economists meets Thursday to review the forecast which lawmakers and the administration must consider in drafting the constitutionally required balanced state budget.

The House version of the two-year, $7.6 billion budget -- based on the forecast for a 6.1 percent revenue growth -- is up for the third of three required House readings later this week.

If the council's forecast drops to 4 percent growth, as expected, it will mean lawmakers need to trim another $180 million from the two-year budget now before the House.

Even before such cuts, the House Finance Committee outlined a multitude of restrictions made by Gov. Linda Lingle's administration to keep the state's spending within the revenue stream at a time of uncertainty over whether the United States will go to war with Iraq.

"Your Committee understands that the governor's reductions will be painful," it said in its report to the House. "Given the uncertain fiscal situation of the State and the potential for geopolitical chaos, your Committee has prepared a biennium budget that reflects this ominous state of affairs."

Putting yesterday's tax report into perspective, the revenues are now back to about where they were two years ago -- before the Sept. 11, 2001, terrorist attacks that provoked a sharp decline in the state's economy.

In February, the state collected $260 million, compared with $260 million in February 2001 and $236 in February last year.

The $2.164 billion collected in the first eight months of the fiscal year is 2.8 percent ahead of the same period last year, but only 1.3 percent, or $28 million, ahead of the eight-month period in 2001.

The key excise and use tax category in February climbed by 11.2 percent over February of last year, pushing the eight-month total, or $1.2 billion, up by 9 percent over last year.

That category accounts for nearly half of the total general fund income and reflects the health of business activity in the state.

Another positive reflection of the economic recovery was the 7.5 percent increase in hotel room tax revenues through eight months compared to the same period last year, but it is still 3.3 percent behind the same period in 2001.