Updated at 12:30 p.m., Wednesday, January 9, 2008
State revenue forecast down for the year
Advertiser Staff
The state Council on Revenues this morning downgraded its state revenue forecast for the fiscal year, which could prompt the Lingle administration and state lawmakers to restrict spending and pare back new spending during the upcoming session.The council dropped its revenue growth projection to 4.9 percent, down from 5.7 percent. For fiscal year 2009, the council slightly upgraded its projection to 4.1 percent, from 3.8 percent, to reflect expected gains in construction and personal income.
State revenue growth was 4.5 percent higher than the last fiscal year through December, and economists did not believe that growth over the next six months would be enough to meet the higher forecast.
The council is optimistic that construction will remain steady to strong, but economists are concerned about the flat to negative picture on tourism.
Lingle administration officials and state lawmakers have warned that slower revenue growth will have an impact on spending decisions in the state's operating budget.
But the council is encouraged by proposals by the Lingle administration and some state lawmakers to make greater investments in state capital improvement projects. The state construction projects could help offset a downturn in private construction.
State construction has been flat the past several years. "In some ways the needs are greater now because we put stuff off," said Carl Bonham, a University of Hawai'i-Manoa economist who serves on the council.
