The tax department reported Tuesday that the 2002 fiscal year ended last month with $87 million less in state tax collections than anticipated when lawmakers in May approved the state budget for the current fiscal year.

The governor said he'll be meeting with his cabinet next week to review the state's financial plan to determine what needs to be done.

Cayetano said he has been through the ebb and flow of state revenues during much of his eight-year administration and is not going to jump every time they go up or down.

"I think we need to look at this situation with some dispassion and calm and then move accordingly," he said. "We're not going to just jump into it and impose draconian type restrictions which may continue to hurt people."

The Legislature should learn a lesson from the situation and consider the even worse financial situation that would exist had he not vetoed major tax credits they approved, Cayetano said.

"I vetoed maybe a half-dozen tax credit bills. If those vetoes were overridden or those vetoes are not good, then they'll face a greater crisis down the road," he said.

The deadline for lawmakers to override his vetoes was last Tuesday. However, Senate Vice President Colleen Hanabusa, D-Nanakuli-Waianae-Makaha, has asked the state Supreme Court to invalidate 13 vetoes on the grounds that Cayetano missed his constitutional deadline to notify lawmakers of his vetoes.

The decline in tax revenues is believed to be the lagging result of tax cuts and tax credits in recent years, Cayetano said.

"We hope, of course, as the economy picks up because of the strength that our reforms have given it, we will make up for the loss of revenues then," he said.

If the decline in tax revenues persists, lawmakers next year should again consider using the $213 million Hawaii Hurricane Relief Fund and the state's rainy day fund to make up for the losses, Cayetano said.

Lawmakers rejected Cayetano's proposal to use the hurricane fund to balance the state budget this year.

However, the governor said he sees no need to call for a special session of the Legislature to address the declining revenues, saying the state "will be able to ride through the next six months" until the 2003 legislative session begins.