Posted on: Saturday, October 9, 2004

State revenues kept climbing last quarter

By Gordon Y.K. Pang
Advertiser Capitol Bureau

The state's revenue situation continues to look bright, according to the latest monthly revenue report issued by the state Department of Taxation yesterday.

Deposits into the state Treasury for the first quarter of fiscal year 2005, which began July 1, come to $946 million, roughly 15.5 percent higher than for the same period of the last fiscal year.

The state Council on Revenues, which makes the forecasts on which the state budget is based, projected last month that revenues would rise by 8.8 percent over the course of the year.

For September, however, general fund revenues were up only 0.6 percent from a year ago — $333.3 million, compared with $331.4 million in September 2003.

State Tax Director Kurt Kawafuchi said that may be because of the so-called "weekend effect" that overstated revenue for September 2003. The end of August 2003 fell on a Sunday, so a portion of that month's revenue collections were counted in September's totals, he said, artificially adding about $30 million to the month's totals.

As a result, general excise and use taxes, the largest category of revenues, actually declined 5.7 percent compared with a year ago, largely because of the weekend effect, Kawafuchi said. For the quarter, general excise and use tax collections increased by 9.7 percent, "indicating the continuing rapid economic growth trend," he said.

Hotel room taxes, another key category, also were understated this September by comparison with last, he said, resulting in a 3.2 percent year-over-year decrease. For the quarter, room tax revenues were up 14 percent.

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