Updated at 6:23 p.m., Tuesday, March 13, 2007
State tax collections to hold steady for next year
Advertiser Staff
State tax collection revenues are expected to hold steady for the next year or so, an official forecasting body reported today. The tax revenue should give lawmakers some confidence as they approach tax relief and spending decisions over the next several weeks.The state Council on Revenues voted today to stick with a December forecast that calls for 6 percent revenue growth this fiscal year and 6 percent growth in 2008. The projected growth is slower than in the past few years, when the state's economy outperformed revenue forecasts.
Economists are concerned about higher inflation and cooling in the tourism and housing sectors, but not enough to lower the forecast.
"The bottom line in all this is there is not enough going on — really — to lead us to change the forecast materially," said Paul Brewbaker, chief economist for Bank of Hawaii and the chairman of the council. "But there are a lot of swirling cross-currents."
Some state lawmakers had predicted the forecast might go down and were encouraged.
The state House has approved the first draft of the state budget and lawmakers are waiting for the outcome of collective bargaining between the state and three public-worker unions before making any commitments. Lawmakers are also required by the state Constitution to provide tax relief this year because the budget surplus exceeded projected revenue by 5 percent for two straight years.
