State revenues forecast
holds steadySlower tax collection rates are expected
to offset a fast start
State fiscal experts are holding the line on revenue growth estimates, meaning that spending plans are not likely to change over the next several months.
The state Council on Revenues yesterday held to the forecast that general fund revenues for fiscal 2004 would be $3.34 billion.
The council also kept the projections for the next six years. Revenues for fiscal 2005 are expected to grow to $3.61 billion.
Rick Von Grechten, council vice chairman, explained that even though the latest tax collection figures show state collections running 7.7 percent more than at this time last year, collection rates are expected to slow in June.
The result, Von Grechten said, will be to balance out the forecast to the same 5.2 percent rate of growth.
House Speaker Calvin Say said he was somewhat surprised that the predictions didn't increase some, but praised the council's "conservative approach."
"I think that by the time the fiscal year ends, you will have a better grasp of the collections," Say added.
Although economists are expecting increased construction activity to generate more jobs and more local spending, the most recent figures from February showed construction to be down 2.4 percent from last year, Von Grechten said.
But economists still expect the state to see a construction boom because of plans to build more military housing.
"We think construction will be stronger and we assume that will continue," Von Grechten said.
Lowell Kalapa, president of the Hawaii Tax Foundation, who in past months called the council's growth estimates "overly optimistic," said he agrees with the decision to hold the line on the spending estimates.
"I agree the numbers are there and the economy is coming back," Kalapa said.
Council on Revenues
http://www.state.hi.us/tax/cor.html