State tax revenues up 5.5% for December

By Lynda Arakawa
Advertiser Capitol Bureau

December state tax revenues were up 5.5 percent, nearly $16 million, over the same month a year ago, the state Department of Taxation reported yesterday.

The increase pushed tax revenues for the first half of the fiscal year to about $1.6 billion. That's 1.8 percent higher — $29.4 million more — than the same time last year.

Tax collections will have to grow at a faster clip, however, to meet the state Council on Revenues projection of a 5.2 percent increase. The council's projections are used by legislators to help craft the state budget. Each percentage point represents about $30 million.

State tax director Kurt Kawafuchi said he was cautiously optimistic that collections would meet the council's forecast, meaning they would exceed 5.2 percent for the last half of the year.

"Indicators of the economy, strong construction, tourism was pretty good over the holidays and the strong real estate sales indicate that the economy as a whole is growing and it's relatively strong," Kawafuchi said.

"But at the same time, tax revenues aren't growing as we would like to see in a strong, robust economy."

Kawafuchi noted that December sales weren't reflected in the tax report because many businesses, including large retailers, don't have to file until the end of the month, and their sales won't appear until the February report.

Individual income taxes collected in December grew $12 million, 12 percent, over December 2002.

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