State tax revenue still lags forecast

By Lynda Arakawa
Advertiser Capitol Bureau

The state received a boost in tax revenues last month, but collections still lag projections that lawmakers use to draft a balanced state budget.

According to state Tax Department figures released yesterday, total revenue for February was $260.1 million, an increase of $23.3 million or nearly 10 percent over February last year. That brings total revenues collected in the first eight months of the fiscal year to nearly $2.2 billion, about 2.8 percent ahead of what was collected at the same time last year.

This latest report comes days before the state Council on Revenues is expected to lower its revenue projections for the year. The council — which makes revenue projections that lawmakers and the administration base the state budget on — had projected 6.1 percent revenue growth this year. It will re-evaluate its projections Thursday.

The administration and top lawmakers are predicting the council will revise its growth projection down to about 4 percent. Deputy Taxation Director Kurt Kawafuchi has said he's looking at a 4.1 percent growth rate.

Each percentage point represents about $30 million, so if the council agrees with the administration, the state would face a shortfall of about $60 million this year and $120 million in the next two years.

Lawmakers, who have been bracing for lower revenue projections and the possibility of war, are considering raising taxes, making deeper budget cuts, and tapping special funds to help balance the budget.

Cumulative general excise and use taxes, the state's largest revenue source and the largest economic indicator, were $1.2 billion, about 9 percent ahead of last year's pace.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 525-8070.