Panel raises isles’
estimated income growth
The state Council on Revenues, noting that Hawaii's economy is doing well, has raised its estimate of personal income growth to 5.4 percent from 5.2 percent for this year and moved next year's rate to 5.5 percent.
The increase sets the state spending ceiling, used to determine how much money the state Legislature can appropriate, but figures on the spending ceiling were not immediately available.
The increase in personal income estimates shows new confidence in the state economy.
Michael Sklarz, Council on Revenues chairman, said the group will have to reconsider its state revenue growth rates at its Dec. 22 meeting and possibly raise them.
In September the council set the fiscal 2004 tax collection rate at 6.2 percent more than last year and the 2005 rate at 6.9 percent.
"The indications are that there will be an upward revision," Sklarz said.
Yesterday's personal income increase was based on the state's hot construction industry and a slight increase in inflation, which went to 1.7 percent from 1.3 percent, according to Sklarz.
The general state economy is continuing to do well, Sklarz said.
Lowell Kalapa, Hawaii Tax Foundation executive director, said the personal income rate could have been set higher because the state inflation rate is expected to rise.
"The personal income goes up when inflation goes up," Kalapa said.
