The Legislature and Gov. Linda Lingle will have to make do with about $125 million less than they thought they would have this year.

Lawmakers already were prepared for a tight budgeting year.

But the state Council on Revenues forecast issued yesterday paints a more dire revenue picture.

The council lowered its forecast, predicting that tax collections for the 2009 fiscal year will be down 3 percent, about $150 million, from the year before. An October forecast predicted a decline of only about $25 million, a 0.5 percent drop.

Lingle submitted her proposed $22.4 billion biennial budget to lawmakers last month based on the negative 0.5 percent projection.

She said the council's revision was not surprising, adding her administration would meet with lawmakers next week to discuss options for balancing the state budget.

“;Facing the realities of significantly reduced revenues, we will be looking at all options with the understanding that everything is on the table for review,”; Lingle said in a written statement released by her office.

Lingle said her original budget proposal would not cut any state jobs, but also would mean no pay raises for state workers.

Earlier this week, Budget Director Georgina Kawamura said the state would be prepared for a downward revision in the revenue forecast. No one in the administration has said what those contingency plans include.

Kawamura said the possibility of cutting jobs cannot be disregarded. Lingle recently said she might seek furloughs of state workers—asking nonessential workers to take off one day a month without pay.

State Human Resources Director Marie Laderta said furloughs are a possibility.

“;The administration is considering all available options for cost containment, but those decisions haven't been made yet,”; Laderta said.

House Finance Chairman Marcus Oshiro has pledged to work with Lingle and said he also is hopeful job losses can be avoided.

“;I would like to encourage the public-sector unions to work with us so we can avoid any layoffs,”; said Oshiro (D, Wahiawa-Poamoho).

 

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  Oshiro said lawmakers are likely to look at excess balances on all existing accounts as a source to make up the revenue shortfall.

“;I think we'll also be looking at certain existing sources of revenue from previously uncollected taxes,”; he said. “;Along that line, I think we'll look at the current tax provisions, exclusions, exemptions and preferential rates on thebooks.”;

Senate Ways and Means Chairwoman Donna Mercado Kim said she wants to study new sources of revenue.

“;I would look at revenue generation before I would look at raising taxes,”; said Kim (D, Kalihi Valley-Halawa). “;One thing comes to mind, obviously, and people have been asking me, 'Well, what about gaming?'

“;Everything is on the table, so we have to take a strong, hard look at some of these things.”;

Special funds also are a potential source of money.

Lingle's proposed budget already planned to tap the state's “;rainy day fund”; for about $40 million, as well as $45 million total from two other special funds. She has not said whether she would consider using the $180 million sitting in the Hawaii Hurricane Relief Fund.

“;The issue is today, but if we raid every single special fund, what's going to happen two or three years from now if we ever ensue a bad situation?”; Kim said. “;So those are the kinds of things that we have to balance out.”;

The Council on Revenues is scheduled to meet again March 12 to deliver its next quarterly forecast.

Yesterday's downward revision comes as tourism numbers for 2008 have plunged to levels not seen since 2001. Visitor counts were down 15.9 percent in November and down 10.2 percent for the 11 months of the year, tourism officials reported last month.

The council's economists said they expect tourism to stay low before starting to rebound near the end of the fiscal year along with a stabilization of the economy overall.

“;What we're facing now is this sort of social fear of losing a job,”; said Carl Bonham, executive director of the University of Hawaii Economic Research Organization. “;That's not going to get better in the next two, three months.”;