State tax revenue ahead of last fiscal year
By Kevin Dayton
Advertiser Capitol Bureau Chief
State tax collections dropped off last month, but total revenue generated so far this fiscal year remains slightly ahead of last year.
The state collected $213.2 million in December, or 7.9 percent less than in December 2000, according to statistics released yesterday by the state Department of Taxation.
But in the six months since the fiscal year began July 1, the state collected almost $1.53 billion, nearly 1 percent more than in the same period last fiscal year.
The state Council on Revenues projected tax collections would decline 0.7 percent for the full fiscal year, triggering a new round of budget cuts by Gov. Ben Cayetano's administration.
The council yesterday decided to stick with that projection, because events are unfolding basically as expected.
The council assumed the state economy would struggle for several quarters after the Sept. 11 terrorist attacks before bouncing back in mid-2002.
"It's not like it's getting good," said Paul Brewbaker, vice president and chief economist for Bank of Hawai'i. "It just didn't get any worse than we've already built in."
Brewbaker said Japanese tourism has been recovering more slowly than the council expected, but Mainland arrivals bounced back more quickly. He said the next 90 days would be critical in signaling wheth-
er the tourism slump is short-term or will last.
Despite income tax cuts and recent layoffs of tourism-related workers and others, collections of withholding tax on wages increased slightly last month, tax officials said.