Like all other state programs, the Hawaii Tourism Authority faces severe funding shortages, which will reduce the fuel for Hawaii's economic engine through much if not all of next year. The travel industry will need to tighten its belt while awaiting the recovery from what has become a global crisis.

President-elect Barack Obama spoke in his press conference Friday about providing financial assistance to states, but that is likely to be directed at vital functions such as education. Tourism probably will have to get by on its own.

The Tourism Authority operates on revenue from the state hotel tax, from which it receives about one-third of that collected. Projections from the state Council of Revenues indicate that the $88 million that had been expected to be available to the authority next year will shrink to $71 million.

The authority is prudent in deciding to cut most aspects of its operation while actually increasing the expenditure on marketing. That includes advertising, the Hawaii Convention Bureau and helping host business and sports events, such as the Pro Bowl and PGA Tour events, which provide wide exposure. Waikiki Improvement Association events, such as Sunset on the Beach and Waikiki by Moonlight, are to be put on hold.

Paul Brewbaker, the Bank of Hawaii's chief economist, expects that visitor arrivals by air in 2008 will have declined by 10.6 percent by year's end, resulting in 0.4 percent drop in jobs growth. He expects visitor arrivals will decline by 0.2 percent next year while job growth will dwindle by 0.5 percent.

Such projections are shaky, as the nation's top economists are unable to forecast when the financial crisis will reach the bottom or how long it will last. Moody's now lists Hawaii among 30 states caught in a recession, while Brewbaker says the state's economy has yet to enter that condition.