Posted on: Thursday, July 12, 2001

State revenues up 6.2 percent in FY 2000

By Lynda Arakawa
Advertiser Capitol Bureau

The state collected $185 million more in the 2000 fiscal year than in the previous year, indicating continued strength in the economy.

For the year ending June 30, state tax revenues totaled $3.16 billion, about a 6.2 percent increase over 1999. That figure falls slightly below the state Council on Revenues projection of 6.5 percent.

The Council on Revenues, a panel of economists that projects state tax collections, had initially predicted tax revenue would increase by 6 percent, but in late May raised its projection to 6.5 percent.

The state and the Legislature draft and revise the budget based on the council's projections, so the actual tax collections should not mean a significant change in state spending beyond what was budgeted this year.

Council Chairman Michael Sklarz said the 6.2 percent increase "is a very good number."

"We've continued to have strong revenue numbers in the last couple years which I think has surprised a lot of people because anecdotally not everybody's convinced that the economy is on a significant recovery path," he said. "The nice thing about revenues is that it's totally cash dollars coming in so no one can argue with it. So there truly is a strength in the economy that these numbers are measuring and reflecting. So all in all it is good news."

General excise tax collections jumped by $103.8 million — or 6.8 percent — over last year. Excise tax collections for June were $18.1 million less than collected in June last year, but Tax Director Marie Okamura attributed that to the "weekend effect" because the last day of June fell on a Sunday, pushing some June tax revenue into July.

Because it is applied to nearly all goods and services, the excise tax is considered to be the most sensitive indicator of the health of the Hawai'i economy. The excise tax is the largest single source of tax collections for the state.

Okamura also said there was a $17.3 million increase in individual income tax refunds and that corporate income tax collections decreased as a result of a $7.3 million drop in estimated taxes.

Sklarz said those figures tend to "bounce around a lot month to month, so I wouldn't make a whole lot out of it."