"We've been very lucky to have a robust economy," said Kurt Kawafuchi, the director of taxation. "Tourism has been strong ... construction, real estate sales, and a lot of other industries have been doing very well."

The sharp increase for July-September, compared to the same period last year, also puts the state's tax intake on course to far exceed the 6 percent gain the Council on Revenues has forecast for this fiscal year, which ends June 30.

Hawai'i's economy has been growly steadily as rising numbers of tourists from the Mainland have visited the islands. A hot real estate market and infrastructure upgrades on isle military bases have boosted the construction of new apartment buildings and homes.

The Council on Revenues is tasked with forecasting the state's annual tax income so the governor can prepare the state budget and the Legislature can decide how it will allocate funds.

Last fiscal year the council badly underestimated how much large the state's revenues would be, initially forecasting they would only rise by 5.3 percent when they actually rose 16 percent.

Jack Suyderhoud, vice-chair of the Council on Revenues, said it was too early to say whether this fiscal year would follow the same pattern.

"I don't think anyone of us on the council would necessarily extrapolate from three months alone," said Suyderhoud, who is also a professor of business economics at the University of Hawai'i.

He cautioned one-time factors can distort data for the relatively short period covered by a quarter.

Suyderhoud said the council had based its prediction for 6 percent growth on the expectation that Hawai'i's economic growth would slow, especially in the latter half of the fiscal year, as tourist arrivals peak and construction slows.

The council reasoned Hawai'i's hotel rooms are already nearly full, which would limit tourism growth. The council also believes the real estate market will cool, tempering the construction boom.

The council is due to give an updated revenue forecast to the governor and the Legislature in early January.

There appears to be no doubt the state is on track to report a large budget surplus, however.

Even before today's data was announced, State Budget and Finance Director Georgina Kawamura said the surplus for the fiscal year that began July 1 would likely reach $632 million.

This comes after a $486 million budget surplus for the last fiscal year.

Gov. Linda Lingle yesterday reiterated her desire to use part of the extra funds for tax relief. She said the state was pulling in enough funds to both boost spending on education and increase the standard income tax deduction for Hawai'i workers who don't itemize their tax returns.

"They are the ones working in the service industry, the fast-food industry who are keeping the economy going, and we have to stop overtaxing them," Lingle said.