Tax revenue in March higher than predicted

By Gordon Y.K. Pang
Advertiser Capitol Bureau

A strong March is signaling that the state should be able to pull in as much money as forecasted for the year by the state Council on Revenues.

That's a positive sign for lawmakers and budget officials, who use the council's projections in formulating the spending plan. The council predicted 5.2 percent growth in the fiscal year that ends June 30. Actual general fund revenues during the first nine months of the year are $2.5 billion, which is about 5.5 percent, or $131.3 million, higher than a year ago.

Cumulative general fund revenue was up only 3 percent at the end of February.

"It's good news," said Senate Ways and Means Chairman Brian Taniguchi, D-10th (Manoa, McCully), after hearing the March numbers.

But state Tax Director Kurt Kawafuchi cautioned not to read too much into the news. "While the March numbers are positive and the cumulative numbers slightly ahead of the 5.2 percent increase projected by the Council on Revenues, we shouldn't get ahead of ourselves," he said, in a statement. "Monthly totals can be quite volatile although we remain cautiously optimistic."

Total tax revenues in March leaped 32.3 percent over the same period a year ago. Actual revenues were $269.7 million for the month, $65.6 million higher than March 2003 revenues.

General Excise and Use tax revenues, considered a good indicator of economic conditions, was up 34.5 percent from March 2003. Excise taxes are now up 5.9 percent for the year.

Also higher were corporate income taxes that increased to $4.7 million while individual income tax revenues were up $5.8 million despite higher refunds due in part to increased electronic filings, the Department of Taxation said in its monthly report.

Reach Gordon Y.K. Pang at gpang@honoluluadvertiser.com or at 525-8070.